More than a year of speculation and months of waiting came to an end today as shareholders of Insignia Financial, headquartered here, threw their support behind the company´s merger with LA-based CB Richard Ellis. The deal, valued at $415 million, is expected to close tomorrow.
When the ink dries, the merger will create what is being touted as the world´s largest brokerage firm. According to a statement released this morning, 'Both CB Richard Ellis´ acquisition of Insignia and Island Fund I LLC´s acquisition of Insignia´s real estate investment assets (immediately prior to the CB Richard Ellis transaction) are expected to be completed on July 23, 2003. As previously announced, holders of Insignia´s common stock will receive $11.156 per share in cash upon closing, assuming both the Island Fund and CBRE-Insignia transactions are completed, as expected.' Island fund is headed by Insignia Financial´s Andrew Farkas.
Capital for the buy comes in large part from a cash contribution of up to $145 million from Blum Capital Partners. CB Richard Ellis has also received a commitment from Credit Suisse First Boston for the necessary debt financing. CB Richard Ellis was taken private in July 2001 in an $800 million management buyout transaction led by Blum Capital Partners. According to one deal-watcher, the infusion from CSFB was a way to 'double down' on its original investment in CB Richard Ellis, made to bank-roll the firm´s move to private status.