DTZ has confirmed that it has bought retail specialist Donaldsons for £39.8m and a deferred consideration of up to £8.8m.
It made the announcement to the stock exchange this morning and said the deal would ‘open up Donaldsons retail and development capabilities to DTZ's capital markets strength and mutually reinforce many other practice areas.’
The deal will be financed with the payment of £20.4m in cash, and the issue of 1,714,484 DTZ shares and the issue of £10.1m of DTZ convertible loan notes. The deferred consideration will be paid with up to £5.4m in cash, the issue of up to a further 285,516 DTZ shares, and up to £1.9m of DTZ convertible loan notes. DTZ said a further payment of up to £5m in cash may be made for a carried interest in an existing fund that Donaldsons helped to develop. The loan notes can be converted into cash or shares at DTZ’s discretion.
The combined business will drop the Donaldsons name and adopt the DTZ brand name from the autumn. It will be headquartered in London.
Donaldsons employs 690 staff in the UK and 220 in continental Europe and last year reported turnover of £62.9m, of which £52.2m was UK related. Its profit before tax was £12.6m.
All 33 equity partners at Donaldsons will join DTZ as directors. Martyn Chase, Donaldsons chairman, will chair DTZ’s UK retail divison and oversee the development of DTZ’s EMEA retail practice. Donaldsons chief executive Peter Mawson and Chase will join DTZ's EMEA executive & strategy Group and its UK & Ireland executive committee.
Mark Struckett, group chief executive of DTZ, said: ‘The combination of Donaldsons with DTZ provides an excellent strategic fit, which both increases and diversifies earnings. We see close cultural alignment and, while Donaldsons will provide opportunities to develop the combined business across all sectors of the market, the strength that Donaldsons brings in the retail segment is of significant importance to us within the UK and continental Europe.’