UGL Limited has entered into a binding agreement to sell its global property services business, DTZ, to a consortium comprising TPG Capital (TPG), PAG Asia Capital (PAG) and Ontario Teachers’ Pension Plan (OTPP) (together TPG and PAG Consortium) for an enterprise value of $1.215 billion.
As previously disclosed on 17 February 2014, UGL has undertaken a process to evaluate third party interest received in DTZ to determine whether a potential sale of the business is in the best interests of shareholders. Following completion of this process, the Board has determined to enter into a binding sale agreement with the TPG and PAG Consortium.
UGL Chairman, Trevor C. Rowe AO said: “Over the past eighteen months, the Board has carefully evaluated various options to determine the optimal corporate structure for UGL, recognising that UGL is comprised of two distinct and sizeable businesses which operate in different markets, with different geographic focuses and strategic requirements. The Board continues to believe a structural separation of DTZ and Engineering is in the best interests of shareholders, and will be beneficial for both our clients and our people.
“To effect the separation of DTZ and Engineering, the Board considered a number of alternatives including a demerger and a sale of DTZ. The Board has concluded that the TPG and PAG Consortium offer to acquire DTZ is in the best interests of the Company and its shareholders. The sale price represents a fair valuation for DTZ, which the Board believes, will deliver significant value to UGL shareholders. The Board also believes the TPG and PAG Consortium are best placed to support the strong future growth potential of DTZ as it becomes one of the dominant global property services players, ensuring the long term interests of our clients and our people are maximised,” Mr Rowe said.
UGL Managing Director and CEO, Richard Leupen said: “Over the last sixteen years, UGL has built one of the leading global property services platforms through both selective acquisitions and investing in organic growth. The sale price reflects the significant value we have created in building a unique platform over this time delivering a highly positive result for UGL and its shareholders. The sale of DTZ to the TPG and PAG Consortium will provide the business with the flexibility to undertake its next stage of growth.
“As highlighted when we announced our intention to pursue a demerger, the operational and strategic priorities and financial requirements of DTZ and Engineering are increasingly diverging. We believe that a separation of the two distinct businesses is the right decision to allow both DTZ and Engineering to solely focus on their own strategies and opportunities for growth unhindered,” Mr Leupen said.
The sale consideration will consist solely of cash and the sale is conditional on certain approvals from regulatory bodies, no material adverse change and other business-related conditions. The transaction is expected to be completed around the end of September 2014. Under the terms of the sale agreement, UGL will also enter into a transition services agreement to facilitate business continuity and the orderly transfer of DTZ to the TPGand PAG Consortium until August 2015.
The European Bank for Reconstruction and Development (EBRD) has launched a Supply Chain Solutions Framework (SCSF), a new mechanism aimed at providing more affordable financing to suppliers (including small...