Jones Lang LaSalle Inc. will acquire Dallas-based real estate brokerage HFF Inc. in a cash and stock deal valued at roughly $2 billion. The move will combine two major players in real estate—both with investments in technology—making JLL a digital leader in the industry with superior team connectivity, improved back-end processes, and best-in-class client tools.
Chicago-based JLL is known for its CRE technology services that include advisory and consulting, software and infrastructure, spatial data services, and IWMS managed services. JLL intends to focus on a substantial multiyear investment plan, driving a digital DNA across the entire organization and capitalizing on the prop-tech aspects exemplified by JLL Spark.
As part of the acquisition, HFF CEO Mark Gibson will join JLL as CEO, Capital Markets, Americas. He also will be co-chair of its Global Capital Markets Board.
Founded in 1998, HFF achieved a record revenue of more than $650 million in 2018. It has closed more than $800 billion in over 27,000 transactions since founding.
The deal, approved by the boards of both companies, is expected to close in the third quarter, subject to HFF shareholder approval and regulatory review.
“…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,” Gibson said in a statement. “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.”
Christian Ulbrich, global CEO of JLL, said the deal fits into the company’s long-term vision to drive sustainable, 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,” Ulbrich said.
A growing part of JLL’s capabilities are centered around technology.
San Francisco-based JLL Spark is dedicated to transforming the real estate industry through technology-based innovation. Backed by JLL’s expertise and resources, JLL Spark provides the nimbleness of a startup with its strategic proptech investments that offer JLL the ability to provide innovative products to real estate owners and operators. Founded in 2017, it is led by experienced Silicon Valley entrepreneurs with successful track records building and investing in tech companies.
JLL will boost its capital market services with the acquisition
Under the deal’s terms, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share. JLL said that based on the closing price of its 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.
JLL said it intends to pay the cash portion of the deal with a combination of cash reserves and its existing syndicated credit facility.
In the acquisition, JLL said it will greatly boost its full-service Capital Markets services to clients, and allow the company 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 around the world.
JLL said that JP Morgan is serving as its exclusive financial adviser, and that Sidley Austin LLP is legal counsel. Morgan Stanley & Co. LLC is the exclusive financial adviser for HFF, and Dechert LLP is its legal counsel.
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