The company is acquiring Dallas-based Staubach in a $613 million deal, as previously reported by GlobeSt.com. More than 60% of the acquisition payments will be made in a deferred payment structure, Martin says. If certain growth objectives are not met, some of the deferred payments can be delayed up to 12 months, she says. The deal also calls for potential earn-out payments that are subject to performance metrics over a four-and-a-half year period after the closing. "The earn-out opportunity of $114 million commences as early as 2011 and it is based on performance incentives that are an alignment of our two merged tenant representational organizations to work successfully together," Martin said during the call.

The merger "is the premier US brand in tenant representation," Dyer says. Approximately 85% of Staubach's revenue comes from tenant representation. Staubach is expected to have revenue of $375 million at the end of its current fiscal year, which ends June 30, Martin says. "The four-year compound annual growth rate is 15% for the last four years," Dyer says. Staubach employs 1,000 professionals, of which about 700 are revenue producing.

The merger will diversify the firm's revenue and is appealing because the tenant representation revenue is not dependent on capital markets, Martin says. "One of the aspects that the tenant representation offers is that you have a very large amount of just annuity characteristics to it because leases just have a contractual life," she says. "At the end of that, a tenant needs to move or stay or do something, all of which generates a fee opportunity." The merger will help the firm "against the capital markets weakness," Martin adds.