CBRE has entered into an agreement to acquire the Global WorkPlace Solutions (GWS) business of Johnson Controls, Inc.
GWS provides Integrated Facilities Management solutions for major occupiers of commercial real estate and has significant operations around the world.
The purchase price is $1.475 billion, payable in cash, or $1.3 billion net of the present value of estimated tax benefits, and with customary post-closing adjustments for working capital and other items.
GWS will operate as part of CBRE’s Global Corporate Services (GCS) business, which has increased revenue at a double-digit compound annual growth rate over the last decade, as more major corporations and other institutions outsource their real estate services.
When the transaction is completed, the full range of combined occupier services – notably including CBRE’s leasing expertise and GWS’s engineering expertise – will be available to the clients of both companies.
“The exceptionally talented GWS team will greatly enhance our service offering for occupiers around the world,” said Bob Sulentic, president and chief executive officer of CBRE. “With GWS, we further our ability to create advantages for occupier clients by aligning every aspect of how they lease, own, use and operate real estate to enhance their competitive position.”
CBRE and Johnson Controls also announced a 10-year strategic relationship.
CBRE will provide Johnson Controls with a full suite of integrated corporate real estate services (including facilities management, project management and transaction services) on more than 50 million suquare feet and Johnson Controls will offer a factory-direct relationship on HVAC equipment, building automation systems and related services to CBRE for its managed properties.
In addition, the companies will jointly fund an innovation lab that will develop energy management solutions to lower costs and enhance their clients’ work environments.
“Clients are increasingly asking us for fully integrated real estate and facilities solutions, which includes self-performing building technical services across their global portfolios,” said Bill Concannon, chief executive officer, GCS for CBRE.
“GWS will further improve our ability to serve clients in more than 50 countries with a market-leading capability in all services, industry sectors and property types. The GWS team is a great fit for our business”
Upon closing, John Murphy, GWS’s president, will join CBRE as global chief operating officer, GCS.
Together, CBRE and GWS will manage nearly five billion square feet of real estate and corporate facilities globally.
