DALLAS–(BUSINESS WIRE)–CBRE Group, Inc. (NYSE:CBRE) today announced that the company plans to combine its Project Management business with Turner & Townsend, its majority-owned subsidiary that provides program management, cost consultancy and project management services globally.
Upon closing the transaction, CBRE will own 70% of the combined Turner & Townsend/CBRE Project Management business, with the Turner & Townsend partners holding the remaining 30%. CBRE acquired a 60% ownership interest in Turner & Townsend in November 2021. Since then, Turner & Townsend has grown revenue at a compound rate of more than 20%.
CBRE’s entire Project Management business, including Turner & Townsend, produced net revenue of approximately $3 billion in 2023(1). Since 2021, combined net revenue has grown at a double-digit annual rate with an approximately 15% net profit margin(2). The net synergies derived from bringing the two businesses together are expected to generate approximately $0.15 of incremental run-rate core EPS(3)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 $70 million, 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 capitalize on this significant opportunity.”
The combined business will be led by Vincent Clancy, Turner & Townsend’s 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.”
Mr. Clancy said: “Our ambition since joining forces with CBRE in 2021 has been to create the premier, differentiated program, 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 program 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 centers 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.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website atwww.cbre.com. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website athttps://ir.cbre.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
About Turner & Townsend
Turner & Townsend is a global professional services company with over 10,000 people in 48 countries. Collaborating with our clients across real estate, infrastructure and natural resources sectors, the company specializes in major programs, program management, cost and commercial management, net zero and digital solutions. Turner & Townsend is majority-owned by CBRE Group, Inc., the world’s largest commercial real estate services and investment firm, with its partners holding a significant non-controlling interest.www.turnerandtownsend.com
