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CHICAGO-In a move to expand its commercial real estate platform, Toronto-based FirstService Corp. has acquired a majority interest in mortgage banking and loan administration provider, Cohen Financial. Jack Cohen, chief executive officer, and his senior management team will retain the balance of the equity.
Although he could not disclose financial details, Cohen tells GlobeSt.com that FirstService's interest will amount to approximately two-thirds of the firm. From Cohen's perspective, the partnership fits perfectly with the company's platform of providing a service-orientated business. "The industry is so awash with lenders and investors that the need for a service business that focuses on a customer base in a best-of-class manner has never been needed more," he says.
As for the timing, Cohen says there was nothing forcing the deal. "In our search for finding the perfect partner we found someone who wasn't in the real estate business but someone in the service business, and it just seemed like a perfect fit," he says. "It was serendipity."
Leading up to the deal, Cohen admits he was amused with the rumors circulating about his company's future. The "best" speculative report, he says, was the company's possible union with Cushman & Wakefield. "Ours is an industry that feeds off rumor mongering," he comments, "so it was hard to keep the true deal quiet."
Jay Hennick, founder and CEO of FirstService, says that partnering with well-known real estate firms will allow the company to leverage its business. In 2004, the company made its entry into the CRE industry with its purchase of Vancouver, Canada-based Colliers Macaulay Nicolls. These acquisitions, says Hennick, "has been the cornerstone to our success, and we intend to continue investing for long-term growth in this strong and growing industry segment."
Based on the completion of the Cohen Financial acquisition, FirstService has also updated the outlook for fiscal 2007. On a diluted earnings per-share basis, the previous guidance of $1.15 per share to $1.25 per share has been adjusted to $1.17 per share to $1.27 per share. FirstService is making headway in growing its property services sector with plans to provide additional services in commercial real estate; residential property management; property improvement; and integrated security services.
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