1st May 2014 11:39
LONDON (Alliance News) - Real estate advisory firm Savills PLC said Thursday it has agreed to acquire Studley Inc, a US commercial real estate services firm specialising in rental tenant representation, in a deal worth USD260 million in cash, promissory notes and Savills shares.
In additional to its US business, Studley owns a 49% stake in AOS Studley, a France-based, Europe-and-Africa-focused tenant representation and project management business.
After the acquisition, the enlarged group will operate in the US as Savills Studley. Savills said the acquisition will provide it with a significant footprint in the US and a strong platform for further growth in the region.
Savills will pay an initial consideration of USD130 million, with around half of this in the form of up to 6.1 million Savills shares valued at up to USD65 million. The balance of the initial consideration will be paid in cash on completion.
In addition, promissory notes with a face value up of USD130 million will be issued to the sellers. Savills said USD60 million of these notes will be payable on the first anniversary of the completion and up to USD70 million on the third anniversary of completion. The majority of the noteholders will be vendor shareholders who will be paid the face value of the third anniversary notes only if they remain actively engaged in the business at the payment date, the firm added.
FTSE 250-listed Savills also said Studley staff will be eligible for a performance-related cash payment of up to USD25 million in March 2018, subject to the achievement of certain earnings growth targets measures over the three financial years to December 17, 2017.
Studley Chairman and Chief Executive Mitchell Steir and President Michael Colacino will act as alternates on the Savills Group executive board. In addition, Steir and Colacino will continue in their respective roles at Savills Studley.
For the year ended December 31, Studley posted pretax profit of USD6.0 million and revenue of USD233 million, Savills said. The New York City-based firm was founded in 1954.
Savills shares were trading at 595.00 pence Thursday afternoon, down 5.00 pence or 0.8%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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