JLL poised for $735m Staubach takeover
Agent in talks to buy American football legend’s ‘tenant rep’ firm
Jones Lang LaSalle is in advanced talks to buy Staubach, one of the biggest privately owned property services firms in the US, in a $735m (£375m) deal.
The expected purchase price is understood to reflect a multiple of 10 times Staubach’s earnings before interest, tax, depreciation and amortisation (EBITDA) or 1.8 times its revenue. Sources in the US said the sale could net Staubach CEO Greg O’Brien about $50m (£25.5m).
It is unclear how JLL will pay for Staubach as neither party would comment. Unless the purchase is made solely with cash, it will need to use its shares, which traded at $66 a share on Wednesday, down from a high of $90 seven weeks ago.
In buying Staubach, JLL would buy a firm that specialises in advising occupiers – or as the Americans term it, ‘tenant rep’ – at a time when fees from investment deals are drying up, particularly in Europe and the US.
JLL is thought to have bid previously on rival tenant rep specialist Trammell Crow, before losing out to CB Richard Ellis, which bought the firm for $2.2bn (£1.12bn) in October 2006.
Staubach is significantly smaller than Trammell Crow was, but will still provide JLL with an annual revenue of around $450m (£229m) from its 1,600 employees across 70 offices throughout North America. JLL’s annual revenue stands at $2.7bn (£1.37bn). In 2007, the firm’s Americas contingent had more than 10,000 staff across 54 offices, generating an annual revenue of $765.2m (£386m).
A sale would mark the end of Staubach’s eight-year-old partnership with DTZ. The alliance, struck in January 2000, created an advisory function for both sides, offering clients access to 12,000 property professionals worldwide. But in the last two years, DTZ has expanded its business in the US and Canada both organically and through corporate purchases, and now has 600 staff across 28 offices.
Two years ago DTZ bought a 50% stake in New York capital markets firm Rockwood Realty Associates. Then in August 2007, it bought Boston property services firm FHO Partners, and in November it bought Canadian firm JJ Barnicke.