TPG, PAG to exit Cushman & Wakefield in $311M equity sale

Cushman & Wakefield headquarters in Chicago (Image: Spear Street Capital)

With Cushman & Wakefield shares up more than 40% over the past 12 months, Texas-based TPG and Hong Kong’s PAG plan to sell their entire stakes in the global real estate consultancy, despite shares remaining 38% below their IPO price from 2018.

Nine years after a group of investors assembled to gain control of Cushman & Wakefield, funds managed by the two private equity firms own 26.5 million C&W ordinary shares, representing 11.6% of the listed company’s outstanding shares on the NYSE, according to a prospectus filed Monday with the U.S. Securities and Exchange Commission.

In the exercise known as an underwritten public offering, TPG and PAG will sell their shares to JP Morgan for the investment bank to resell. Friday’s closing share price of $11.72 implies a value of more than $310.7 million for the combined equity. The 40% increase in C&W’s stock price over the past year is nearly double the 20% increase in the Dow Jones Industrial Average over the same period.

“The underwriter will from time to time offer the shares for sale in negotiated transactions or otherwise at market prices in effect at the time of sale, at prices related to such market prices or at negotiated prices,” Cushman & Wakefield said in a release on Monday .

receipt

In 2015, TPG and PAG partnered with the Ontario Teachers’ Pension Plan to buy Cushman & Wakefield for $2 billion, after the investment group acquired London-based DTZ the previous year.

Brett White remains executive chairman at C&W

The merged company continued under the Cushman & Wakefield banner and went public with a $765 million IPO in 2018, at which time TPG, PAG and Ontario Teachers held respective stakes of 44.7%, 33.6% and 11, 7%

Chicago-based Cushman & Wakefield has grown to rival top global agencies CBRE and JLL, but last month the consultancy reported a net loss of $28.8 million for the first quarter of 2024 after posting losses over $100 million for the entire year 2023.

By comparison, CBRE reported 2023 net income of $986 million, down 30%, while JLL reported net income of $225.4 million, down 66%.

Cushman & Wakefield will not receive any proceeds from the offering, said the agency, which has 52,000 employees in nearly 400 offices in 60 countries. Final terms of the transaction will be disclosed in a prospectus supplement to be filed with the SEC at a later date.

Constant flow of transactions

News of the potential exit comes at a busy time for PAG and TPG, with the latter recently closing its eighth Asia-focused private equity fund with $5.3 billion of committed capital and a pair of real estate vehicles co -branded Angelo Gordon that raised $2.50. billion. TPG acquired Manhattan-based Angelo Gordon last November for $2.7 billion.

For its part, PAG announced in April an agreement with partners CITIC Capital, Ares Management, Abu Dhabi Investment Authority and Mubadala Investment Company for a $8.3 billion takeover of Dalian Wanda Group’s main mall management business .

The consortium’s takeover of Wang Jianlin’s mall empire came after the tycoon’s Dalian Wanda Group failed to list its shopping center management business on the Hong Kong stock exchange after it floated 5.9 billion yuan. dollars in pre-IPO funding from investors, including PAG, in 2021.