SYDNEY, CHICAGO—UGL Limited has just entered into an agreement to sell DTZ, a global property services firm headquartered in Chicago, to a private equity consortium for $1.215 billion. Officials from the Sydney-based firm say they will complete the deal with TPG Capital, PAG Asia Capital and Ontario Teachers' Pension Plan by September. Company officials could not be reached by deadline, but GlobeSt.com will provide updates and additional information this week.
As reported in GlobeSt.com, UGL, known as an engineering firm in its home country, took ownership of the then-troubled DTZ in early December 2011. Soon after, investors regained confidence in DTZ, and the firm began to recover. In less than a year, its annual statement revealed a firm that boasted $2 billion in revenue. However, UGL officials say that to continue growing, the company requires a different structure.
“Over the past eighteen months, the board has carefully evaluated various options to determine the optimal corporate structure for UGL, recognizing that UGL is comprised of two distinct and sizeable businesses which operate in different markets, with different geographic focuses and strategic requirements,” said UGL chairman Trevor C. Rowe in a prepared statement. “The board continues to believe a structural separation of DTZ and Engineering is in the best interests of shareholders, and will be beneficial for both our clients and our people.”
Board members looked into several options to bring about that separation, but eventually concluded that a private equity owner would give DTZ the best opportunity for growth. After UGL and the consortium finalize the agreement, UGL will concentrate on providing engineering, construction and maintenance services in Australia, New Zealand and South East Asia.
“As highlighted when we announced our intention to pursue a demerger, the operational and strategic priorities and financial requirements of DTZ and Engineering are increasingly diverging,” said UGL managing director and chief executive officer Richard Leupen. “We believe that a separation of the two distinct businesses is the right decision to allow both DTZ and Engineering to solely focus on their own strategies and opportunities for growth unhindered.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
