By Peter Grant
CBRE Group Inc., the world's largest commercial
real-estate-services company by revenue, is negotiating to buy the
division of Johnson Controls Inc. that manages 1.8 billion square
feet of corporate real estate globally, according to a person
familiar with the matter.
The price couldn't be determined. But analysts have estimated
the value of the division, named Global Workplace Solutions, was
between $600 million and $1.5 billion.
The Global Workplace business reported revenue of $4 billion for
the fiscal year ended Sept. 30, 2014, a 4% decline from 2013.
Income fell 16% last year to $95 million.
The business provides on-site staff for managing and maintaining
commercial buildings. Johnson Controls acquired the business in
1989 from airline Pan Am Corp., which started the business to
manage airports, military bases and U.S. space centers.
Johnson Controls said last year that it had hired Bank of
America Merrill Lynch to divest the division, which it has owned
for more than 20 years, because it didn't fit with its core
businesses. Chief Executive Alex Molinaroli has been focusing,
instead, on York-brand heating and air-conditioning equipment for
commercial buildings, and on devices for monitoring and regulating
electricity usage, temperature, fire safety and security.
A spokesman for Johnson said: "We're still in the process of
divesting our Global Workplace Solutions business." He declined to
comment further. A spokesman for CBRE declined to comment.
Reuters earlier reported the negotiations on Thursday.
CBRE's talks to buy the division come at a time of increasing
merger and acquisition activity in the commercial
real-estate-services business. Cushman & Wakefield Inc.
recently hired an adviser to put that firm on the block.
Also, Toronto-based FirstService Corp. announced plans to spin
off its commercial-real-estate unit, Colliers International, as a
separate publicly traded company. And private-equity firm TPG has
acquired Chicago-based DTZ and Washington-based Cassidy Turley and
merged those two firms.
Bob Tita contributed to this article.
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