CBRE Group has announced that it intends to acquire all the issued and to-be-issued shares of Telford Homes. The purchase represents a strategic expansion of CBRE’s highly successful Trammell Crow Company real estate development business, which has achieved robust earnings growth over the past five years while producing very strong returns for its capital partners. Telford generated approximately €394m (£354m) of revenue and €44.5m (£40m) of pre-tax profit for the 12 months ended March 31, 2019. Under the terms of the planned transaction, Telford shareholders will receive €3.90m (£3.50) per share in cash, valuing Telford at €297.7m (£267.4m).
Upon completion of the acquisition, which is expected in the third quarter of 2019, Telford will operate as part of the Trammell Crow Company and its financial results will be reported within CBRE’s Real Estate Investments business segment. Di-Stefano will continue to run the Telford business after the deal closes. The transaction is subject to customary regulatory approvals. It also requires approval by a majority of Telford shareholders voting on the transaction and who represent at least 75% in value of the votes cast. The proposal has received the recommendation of the Board of Directors of Telford, and each member of the Telford Board has committed to vote their shares in favour of the proposal.
“Telford gives us a compelling opportunity to build on the success of Trammell Crow Company,” said Bob Sulentic, president and chief executive officer of CBRE. “The UK is in the early stages of a secular shift toward institutionally owned urban rental housing, similar to what we have seen in the US over the last two decades. Telford is well-positioned to lead this trend, and their more than 300 talented professionals operating in London are a great addition to our company.”
“Being part of Trammell Crow Company will allow Telford to enhance its growth in the build-to-rent / multifamily market in London,” said Jon Di-Stefano, chief executive officer of Telford Homes. “Our management team have found that Trammell Crow Company is aligned with both our culture and our current strategy and its platform will give Telford access to far greater resources, improved technology and wide-ranging expertise.”