Investment-management and real estate firm Jones Lang LaSalle Inc. (JLL) has entered an agreement to acquire HFF Inc. in a cash-and-stock transaction worth about $2 billion. JLL and HFF are competing brokerages that work within the self-storage sector. Though the deal has been unanimously approved by both boards of directors, it’s subject to approval by HFF shareholders and customary closing conditions, including regulatory review. It’s expected to close during the third quarter, according to a press release.
As part of the deal, HFF CEO Mark Gibson is expected to join JLL as CEO of capital markets in the Americas as well as co-chair of its global capital markets board. It’s unclear how the deal might change the structure of the companies’ self-storage divisions. Most of HFF’s involvement in the industry is handled by its subsidiary, Holliday Fenoglio Fowler LP.
“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,” the release stated.
“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. “We have long admired HFF for its expertise and leading reputation in the industry, as well as its client-first culture of teamwork, ethics and excellence, which aligns with our own. I believe that combining our organizations will deliver a range of compelling benefits for our clients, employees and shareholders.”
Since 1998, HFF has closed more than $800 billion in more than 27,000 transactions. It pulled in more than $650 million in revenue last year, a record amount.
“This is a terrific transaction for our shareholders, providing them with an immediate cash payment and the opportunity to participate in the long-term value of the combined company,” Gibson said. “In addition, we believe the combination with JLL will create a superior platform for our shareholders, clients and employees than either company would have independent of the other and will significantly accelerate our firm’s strategic plan. JLL’s team-oriented culture with the additional standards of high character and integrity are an excellent match with the HFF culture, which has been HFF’s fundamental differentiator since its inception.”
Under the terms of the agreement, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share. Upon closing, JLL shareholders are expected to own approximately 87 percent of the combined company, while HFF shareholders are expected to own about 13 percent, according to the release.
Once the deal closes, JLL is expected to add one of HFF’s existing directors to its board of directors.
JLL is a Fortune 500 company with annual revenue of $16.3 billion. It operates in more than 80 countries with a global workforce of about 90,000 employees.
HFF is the parent company of subsidiaries HHF LP, HFF Real Estate Ltd. and HFF Securities LP. The firm operates out of 26 offices nationwide and specializes in advisory services, commercial-loan servicing, debt and equity placement, and investment and loan sales.
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