The Grubb & Ellis board authorized the Kojaian Ventures' investment after receivingthe recommendation of a special committee of Grubb & Ellis' disinterested directors.
C. Michael Kojaian is a long time Grubb & Ellis stockholder and member of the firm's board of directors.
According to Grubb & Ellis management, the investment also provides an opportunity to further develop relationships between the two firms. Kojaian is rapidly becoming the largest office developer in the Southeast Michigan area.
The capital injection, according to Grubb chief financial officer Ian Bress, will be used to retire $5 million in debt currently owed to the company's largest stockholder, Warburg Pincus. The remainder will be used to replace a $4.2-million Warburg Pincus equity investment in Grubb and to pay down the $6 million in principal amount of debt outstanding on the company's credit facility.
Bress adds the closing of the transaction is subject to Grubb & Ellis receiving an opinion from an independent financial advisor as to the fairness of the transaction and other standard closing conditions, but is not contingent on financing.
Grubb & Ellis CEO Barry Barovick says Kojaian has been an active leader andmajor investor in the firm since 1996.
"This is more than just an investment of capital," Barovick says. "It's a demonstration of Michael Kojaian's confidence in our company's ability to establish an innovative new business platform, and increase our client base, market share and revenues."
Kojaian says he knows from firsthand experience the industry needs a global service resource.
"Grubb & Ellis has made significant progress during the past year to fully develop that capability," Kojaian says.
Grubb & Ellis' resources include more than 8,000 people in over 200 offices in 30 countries, including its domestic affiliates and a strategic initiative with Knight Frank, a property consulting firm in Europe, Africa and Asia Pacific.
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