Photo by Christian Garibaldi/Courtesy: Studio 1200
By Joshua Burd
Real estate services giant JLL has agreed to acquire HFF for roughly $2 billion, greatly bolstering its platform with one of the industry’s leading capital markets firms.
The companies announced Tuesday that they have entered into a definitive agreement under which JLL will acquire all outstanding shares of HFF in a cash and stock transaction. The deal has been unanimously approved by the boards of directors of both companies.
HFF, which has inked some of New Jersey’s largest and highest-profile investment sales and debt and equity deals in recent years, has an office in Morristown led by industry veterans Jose Cruz and Jon Mikula. JLL has offices in East Rutherford, Parsippany, Iselin and Cherry Hill.
Since 1998, Houston-based HFF has closed more than $800 billion in over 27,000 transactions, achieving record revenue in 2018 of more than $650 million, according to a news release. CEO Mark Gibson will now join JLL as CEO, Capital Markets, Americas, and co-chair of its 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,” said Christian Ulbrich, global CEO of JLL, which is based in Chicago. “The combination with HFF provides a unique opportunity to accelerate growth and establish JLL as a leading capital markets intermediary, with outstanding capabilities.
“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.”
The transaction is slated to close in the third quarter of 2019, subject to HFF shareholder approval and customary closing conditions, including regulatory review, the news release said. As a result, JLL expects to significantly strengthen its capital markets services to clients, accelerate growth of its debt advisory business in Europe and Asia Pacific and drive increased operating efficiency globally.
“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.”
Key HFF senior leaders and capital markets advisers have entered into three- to four-year commitments related to employment, noncompetition and/or retention.
Under the terms of the agreement, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share, the news release said. Based on the closing price of JLL stock of $163.02 on March 18, the cash and stock consideration to be received by HFF shareholders at closing is valued at $49.16 per HFF share.
For more information about the deal, see JLL’s official announcement.
