This article is from the Australian Property Journal archive
A MULTINATIONAL consortium led by Texas-based private equity firm TPG Capital Management has bought DTZ, the real estate arm of UGL Limited, for $A1.215 billion.
Reuters reported that UGL has sealed the $US1.14 billion deal last Friday with the TPG consortium, which includes the Ontario Teachers’ Pension Plan (OTTP) and Hong Kong’s private equity firm PAG.
The sale is a huge windfall for UGL, which acquired DTZ in December 2011 for £77.5 million ($A119 million) and merged it with its own property business.
Proceeds from the DTZ sale would be used to reduce debt in UGL’s main engineering services business, which has been affected by the slowdown in the mining sector.
The deal means the proposed public float of DTZ announced in August last year would not go ahead. DTZ would have become the first real estate company to be listed on the ASX, similar to CBRE and JLL on the New York Stock Exchange and Savills Plc on the London Stock Exchange.
The sale of DTZ is part of UGL’s plans to split its property business (DTZ) and the engineering, construction and maintenance services in Australia, New Zealand and Asia.
DTZ operates in 52 countries and employs over 47,000 people and generates annual revenue of $2.0 billion. UGL acquired DTZ in December 2011 and brought it under the UGL property services umbrella.
However in September 2012, UGL reversed the move and rebranded its property business as DTZ.
In FY2013, DTZ revenue increased by 21% and EBIT rose 19% to $113.4 million, representing a margin of 5.9% and DTZ’s eleventh consecutive year of earnings growth.
In the HY2014, DTZ reported a 27% growth in earnings for the six months to December 30, to $58.3 million. Revenue increased 18% to $1,081.9 million.
DTZ’s order book stands at $3.4 billion.
Property Review
