TPG-led JV buys US agency ahead of merger with DTZ

A joint venture led by private equity giant TPG Capital has agreed to buy US-based commercial real estate services firm Cassidy Turley and combine it with DTZ Group to create a global property brokerage.

Cassidy Turley, based in Washington, will be purchased by DTZ Investment Holdings. The transaction is backed by TPG, Asian alternative investment manager PAG Asia Capital and the Canadian pension fund Ontario Teachers’ Pension Plan, the joint venture that is in the process of taking over DTZ.

Financial details were kept confidential.

The acquisition, which is expected to create a company with more than $2.9 bn of revenue, is dependent on Cassidy Turley’s combination with DTZ to create a global, full-service commercial real estate services company, the companies said in a statement.

The consortium’s acquisition of DTZ is currently scheduled to close around 31 October 2014. The acquisition of Cassidy Turley is expected to close on 31 December 2014.

Cassidy Turley is a commercial real estate services provider with more than 4,000 professionals in more than 60 offices nationwide. With headquarters in Washington, DC, the company manages 400 million sq ft on behalf of institutional, corporate and private clients.

DTZ will retain the DTZ brand after the merger.

'Following a period of intensive mutual due diligence, we are confident that this combination is an excellent cultural fit as well as an opportunity to partner with a global brand,' said Cassidy Turley CEO Joseph Stettinius.

'Cassidy Turley is a leading real estate services business in the US and will complement DTZ's existing very strong businesses in Asia and Europe as well as DTZ's existing US businesses,' added Ben Gray, Managing Partner, Asia, TPG.

Brett White, former CEO of CBRE Group, is investing in the acquisition alongside the consortium and will be joining the board of directors once the DTZ transaction is completed, before becoming executive chairman of the new company in March 2015. In addition, Tod Lickerman will continue in his current role as Global Chief Executive Officer of DTZ, while Joe Stettinius will become CEO in the Americas.

They will work together to develop a plan to integrate the Americas business. 'The combined companies will create a game-changing organization – not only for us but for the entire industry,' commented Stettinius.

Challenger Capital Group and JP Morgan Securities acted as joint financial advisors. Buchanan Ingersoll & Rooney PC acted as legal adviser.

TPG Capital, PAG Asia Capital and Ontario Teachers’ Pension Plan entered into a binding agreement to buy DTZ from Australian group UGL in June for AU$1.2 bn (€840 mln).

Sydney-listed UGL had acquired London-based broker DTZ for about €90 mln in December 2011, and merged it with its own property services business. In August 2013 UGl said that it intended to demerge DTZ, possibly with a separate listing. Later as unsolicited offers were made it was decided to sell the property adviser.