Upon closing the transaction, CBRE will own 70 percent of the combined Turner & Townsend/CBRE project management business, with the Turner & Townsend partners holding the remaining 30 percent. CBRE acquired a 60 percent ownership interest in Turner & Townsend in November 2021. Since then, Turner & Townsend has grown revenue at a compound rate of more than 20 percent.
CBRE’s entire project management business, including Turner & Townsend, produced net revenue of approximately $3bn in 2023. Since 2021, combined net revenue has grown at a double-digit annual rate with an approximately 15 percent net profit margin. The net synergies derived from bringing the two businesses together are expected to generate approximately $0.15 of incremental run-rate core EPS by the end of 2027, an amount that is expected to grow over time. The cost of the incremental investment in Turner & Townsend/CBRE project management is approximately $70mn, exclusive of deal costs.
Bob Sulentic, CBRE’s Chair and Chief Executive Officer, said:
Unifying our project management business will create an offering that is unmatched for its scale and breadth of capabilities, with more than 20,000 employees serving clients in over 60 countries.
“Powerful secular trends, particularly increased spending on infrastructure, green energy, and employee experience, are growth catalysts for this business and we are well positioned to capitalise on this significant opportunity.”
The combined business will be led by Vincent Clancy, Turner & Townsend’s Chairman and Chief Executive Officer, who will continue to report to a Board controlled by CBRE and comprised of senior executives from both CBRE and Turner & Townsend.
“Vince is an exemplary leader who has guided Turner & Townsend to great success,” Mr. Sulentic said.
“Putting CBRE’s extensive global project management resources and capabilities under Vince will strengthen our value proposition for clients and advance our growth ambitions.”
Vincent Clancy, Turner & Townsend’s Chairman and Chief Executive Officer said:
Our ambition since joining forces with CBRE in 2021 has been to create the premier, differentiated programme, project and cost management capability globally.
“We have made exceptional progress towards this goal and our revenue and profit have grown significantly in the last three years. Turner & Townsend’s momentum will continue to grow with the combining of two great businesses into one integrated, pure-play project management capability. Our combined depth of talent and resources, global footprint, sector expertise and commitment to excellence will be second to none in project and programme management.”
The CBRE Board of Directors intends to appoint Mr. Clancy to the CBRE Board upon closing the transaction.
“Vince will bring a global perspective and deep experience in key growth areas like renewable energy and infrastructure to our Board. We look forward to his insights and contributions,” Mr. Sulentic said.
Beginning in 2025, CBRE intends to report project management results in a new segment separate from Global Workplace Solutions in order to provide increased transparency for investors.
Turner & Townsend operates across three business segments globally, real estate – serving investors and occupiers across all property types, including data centres and life sciences; infrastructure – notably transport and aviation; and energy and natural resources – including renewable energy, alternative fuels and liquified natural gas.
The transaction is expected to close around year-end, subject to satisfaction of regulatory and other customary conditions and completion of required consultations with employee Works Councils in certain jurisdictions.