DTZ Holdings plc has announced that it has acquired J.J. Barnicke Limited, Canada's largest independently owned, full service commercial real estate services company.
DTZ is acquiring J.J. Barnicke Limited for a consideration of CAD 26.6 million (c. 18.5m), subject to a working capital adjustment. A further payment of up to CAD 1.6 million (c. 1.1m) is payable to the vendors contingent upon certain conditions being met. This acquisition will be funded out of DTZ's existing facilities with up to CAD 6.8 million (c. 4.7m) paid in the form of loan notes convertible into DTZ ordinary shares. The total consideration includes a deferred amount of CAD 2.9 million (c. 2m) to be paid over three years. Up to 40% of the deferred consideration may be paid in the form of loan notes convertible into DTZ ordinary shares. The initial consideration is being satisfied by a cash payment of CAD 17.6 million (c. 12.2m) and the issuance of loan notes in the amount of CAD 6.1 million (c. 4.1m) convertible into 743,507 DTZ ordinary shares.
On a normalized basis, J.J. Barnicke Limited's earnings before interest, taxation, depreciation and amortisation (ebitda) were CAD 3.8 million (c. 2.6m) for the year to 31 December 2006. Gross assets acquired are CAD 20.0 million (c. 13.9m). The transaction is anticipated to be broadly earnings neutral in the current financial year and earnings enhancing thereafter.
J.J. Barnicke Limited, which will be renamed DTZ Barnicke with immediate effect, is headquartered in Toronto and has 17 owned and affiliate offices across Canada with some 450 employees including more than 300 real estate professionals. J.J. Barnicke Limited provides a comprehensive range of commercial real estate brokerage services and value-added business advice in commercial real estate to leading international corporations, institutions and portfolio owners across Canada. Clients include tenants, developers, owners, investors, governments and landlords covering all commercial real estate asset classes such as office, industrial, capital markets/ investment, retail, hospitality and corporate services.
Following the acquisition, DTZ will continue to benefit from the experience and expertise of Chris Ridabock, previously president of J.J. Barnicke Limited, who has been appointed as chief executive officer of the DTZ Barnicke business. Joseph J. Barnicke, who founded the firm in 1959, will remain as chairman for a transition period.
As a result of this acquisition, DTZ one of the top four global advisers in commercial real estate with a strong presence in Europe, Asia Pacific and other parts of the world will further expand and strengthen its real estate advisory and transactional services in North America. The acquisition of J.J. Barnicke Limited builds upon DTZ's other recent corporate development activity in North America, including the investment in Boston-based DTZ FHO Partners, which provides occupational services, announced in August 2007 and DTZ's acquisition of 50 per cent of New York-headquartered DTZ Rockwood last year. DTZ Rockwood provides both transactional and advisory capital markets services across North America.
Mark Struckett, group chief executive of DTZ, said: "Today's acquisition demonstrates the importance we put on the North American market as part of our continuing focus to meet the cross border needs of our multinational clients. DTZ's acquisition of J.J. Barnicke Limited is an important step for both companies and one that underpins our long-established strategy to meet the increasing demands of organisations wanting to take a worldwide approach to procurement, property solutions and service delivery. Our clients around the world will benefit from the additional depth, reach and expertise now available to us throughout Canada, while J.J. Barnicke Limited's clients will benefit from DTZ's strong global delivery platform in serving their cross-border needs at a time when Canadian investors are becoming more active globally. We look forward very much to working with the J.J. Barnicke Limited