CBRE Group to acquire the Global Workplace Solutions Business of Johnson Controls

CBRECBRE Group is to acquire the Global WorkPlace Solutions (GWS) business of Johnson Controls, Inc. GWS is a provider of integrated facilities management solutions for major occupiers of commercial real estate and has significant operations around the world. The purchase price is $1.475 billion, payable in cash, or $1.3 billion net of the present value of estimated tax benefits, and with customary post-closing adjustments for working capital and other items. GWS will operate as part of CBRE’s Global Corporate Services business.

“The exceptionally talented GWS team will greatly enhance our service offering for occupiers around the world,” said Bob Sulentic, president and chief executive officer of CBRE. “With GWS, we further our ability to create advantages for occupier clients by aligning every aspect of how they lease, own, use and operate real estate to enhance their competitive position.”

JOHNSON CONTROLS LOGOGWS, which has approximately 16,000 employees worldwide, generated approximately $3.4 billion of revenue for the 12 months ended December 31, 2014. Upon closing, John Murphy, GWS’s president, will join CBRE as global chief operating officer, GCS.

Together, CBRE and GWS will manage nearly 5 billion sq. ft. of real estate and corporate facilities globally, including 2.3 billion sq. ft. in the Americas, 1.2 billion sq. ft. in Europe, the Middle East & Africa and 1.4 billion sq. ft. in Asia Pacific.

CBRE anticipates that GWS will be materially accretive to its adjusted earnings per share in 2016. It expects to fund the acquisition through a combination of cash on hand and proceeds from the incurrence of debt. The transaction is expected to close in the late third quarter or early fourth quarter of 2015 and is subject to customary regulatory approvals. Simpson Thacher & Bartlett LLP acted as CBRE’s legal advisor.

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