HFF to be Acquired by JLL in $2 Billion Deal
Real Estate In-Depth | March 2019
CHICAGO—Commercial brokerage firm JLL reported on March 19 it had entered into a definitive agreement to acquire HFF, Inc. in a cash and stock transaction with an equity value of approximately $2 billion.
The two companies reported the transaction was unanimously approved by the boards of directors of both companies. Mark Gibson, CEO of HFF, will join JLL as CEO, Capital Markets, Americas and co-chair of JLL’s Global Capital Markets Board.
“Increasing the scale of our capital markets business is one of the key priorities in our ‘Beyond’ strategic vision to drive long-term sustainable and profitable growth. The combination with HFF provides a unique opportunity to accelerate growth and establish JLL as a leading capital markets intermediary, with outstanding capabilities,” said Christian Ulbrich, Global CEO of JLL.
The brokerage firm stated the acquisition of HFF will significantly bolster its full-service capital markets services to clients. The transaction will allow JLL to rapidly scale its U.S. Capital Markets presence, accelerate growth of its debt advisory business in Europe and Asia Pacific and drive increased operating efficiency globally.
Since 1998, HFF has closed more than $800 billion in more than 27,000 transactions, achieving record revenue in 2018 of more than $650 million.
JLL intends to fund the cash portion of the purchase price consideration with a combination of cash reserves and its existing syndicated credit facility. The combination is expected to deliver significant run-rate synergies, estimated at approximately $60 million over two to three years, JLL reported.
The transaction is expected to close in the third quarter of 2019. The transaction is not contingent upon receipt of financing. JP Morgan is serving as exclusive financial advisor for JLL, and Sidley Austin LLP as legal counsel. Morgan Stanley & Co. LLC is acting as exclusive financial advisor for HFF, and Dechert LLP as legal counsel.
Upon closing of the transaction, JLL shareholders are expected to own approximately 87% of the combined company, and HFF shareholders are expected to own approximately 13%.