Search
 

JLL Hopes Merger Offsets Slowdown Threats

CHICAGO- JLL believes that a merger with Staubach will diversify the firm's revenue and that the rumors of a culture clash are unjustified.

By Gina Kenny | Updated on June 17, 2008

CHICAGO-Jones Lang LaSalle expects that a merger with Staubach Co. will diversify the firm’s revenue, and will make the public firm a strong player in tenant representation. “We will further diversify our business and help offset the current slowdown, which we are experiencing in capital markets,” said Colin Dyer, CEO of JLL, on Tuesday morning. Dyer and Lauralee Martin, CFO and COO, spoke to shareholders and answered questions on the merger, and a possible conflict of cultures, during a conference call this morning.

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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.