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The $2.2 billion transaction was unanimously approved by the board of directors for Trammell Crow and requires the approval of the company's shareholders.
When complete, the combined company will have pro-forma revenues of about $4.4 billion in 2006 and 21,000 employees, according to CB Richard Ellis.
The acquisition is expected to be completed in late 2006 or early 2007 and also requires approval from federal regulators. The deal will be financed with term loans and by amending CB Richard Ellis' $600 million in revolving credit, the company said.
Brett White, CB Richard Ellis’ president and CEO, said the acquisition would allow the company to further its goal of providing comprehensive market-leading real estate services to clients.
"Trammell Crow Company is one of the premier service companies in our industry, with a rich history, dedicated employees and strong management, a stellar client base and core competencies that are highly complementary to our own,” White says.
Trammell Crow Chairman and CEO Bob Sulentic agreed that the transaction will lead an improved range of services.
"We’re particularly excited about uniting the two firms’ transaction management strength, corporate outsourcing and institutional expertise," Sulentic said in a statement.
As a result of the acquisition, CB Richard Ellis said it plans to sell Trammell Crow's approximately 20 percent ownership interest in Savills, plc, a real estate services provider in the United Kingdom.
When the acquisition is complete, Trammell Crow’s development and investment business will be run as a wholly owned but independently operated subsidiary that retains the Trammel Crow name, CB Richard Ellis said.
The combined company will provide services to more than 85 percent of the Fortune 100.
As a result of the transaction, CB Richard Ellis’ contractual revenues associated with outsourcing activities are anticipated to increase from approximately 8 percent to 18 percent of total revenues, based on 2006 expected results, the company says.
Sulentic will join CB Richard Ellis as group president with responsibility for the Development and Investment business as well as the Company’s EMEA and Asia-Pacific operations.