GVA agrees deal with Bilfinger

GVA, the UK’s largest independent commercial property adviser, has announced it is to merge with German-based global engineering and services group Bilfinger.

In a statement on Tuesday, GVA said it has signed a memorandum of understanding with Bilfinger to give the German group 100% ownership in the business.

Exchange of contracts and completion is expected before the end of June 2014.

Headquartered in London and with 12 offices, GVA is currently the UK’s largest independent commercial property consultant. Its overall business generated turnover of £147.3 mln (€177 mln) in the year ended 30 April 2013, up from £140.4 mln the previous year. The 190-year old agency is also the majority shareholder in GVA Worldwide, a partnership of independent commercial real estate companies serving over 50 markets throughout Europe and Asia.

The Bilfinger group is structured into four business segments – Industrial, Power, Construction and Building and Facility. Within Building and Facility sits its real estate division with some 1,500 professionals and annual turnover of €160 mln. Bilfinger Real Estate has operations in Germany, the UK, the Netherlands, Switzerland, Turkey, Poland, Canada and Australia. Its existing clients include RBS, Morgan Stanley, Credit Suisse, AXA, Union Investment and IVG.

'Like GVA, Bilfinger Real Estate’s business is consultancy based and GVA’s ambitions to rapidly increase its share of global mandates are matched by Bilfinger Real Estate’s commitment to forming an international real estate consultancy,' the company said in a statement.

The decision to work with Bilfinger Real Estate as GVA’s preferred strategic merger partner follows the completion of a review by investment bank Canaccord Genuity, which commenced in October 2013, into GVA’s options to pay back its minority private equity owner and grow on the international stage.

This transaction will allow Lloyds Development Capital, the private equity investor with a 27.5% stake in GVA, to exit. LDC’s initial investment supported the company through a financial restructuring programme to help GVA secure access to external capital to undertake large acquisitions.

'This hugely exciting deal marks the most significant and transformational milestone in the history of our company,' said Rob Bould, Chief Executive at GVA.

Bould continued: 'We chose Bilfinger Real Estate as our preferred partner over other suitors with varying propositions. Three factors stood out in Bilfinger: firstly, its makeup and structure offers us limitless opportunities to be a part of a business that can truly compete on an international stage, gaining access to key European and emerging markets throughout the world. Secondly, its financial strength gives us the longer term security essential to our culture, and in maintaining our strong balance sheet. Lastly, whilst Bilfinger Real Estate gives us great international exposure, its limited UK presence means GVA’s existing business can provide a ready-made platform for Bilfinger Real Estate’s expansion.'

Aydin Karaduman, CEO at Bilfinger Real Estate, noted: 'This deal is part of a strategic plan to develop a leading international real estate consultancy and management offer with representation in every major commercial centre in the world.'

GVA's strategic review came after a restructuring of its debt in 2012 and sharp improvements in the company's pre-tax profits which grew from £146,000 in the 2011-12 financial year to £7.8 mln in 2012-13.

Last year, GVA completed a restructuring of its debt with shareholder Lloyds Development Capital, exchanging loan notes valued at £60 mln for a 27.5% stake in the company.