JLL to Acquire HFF in $2B Deal

Michael Tucker mtucker@mba.org

March 21, 2019


Jones Lang LaSalle agreed to acquire HFF in a cash and stock transaction value at nearly $2 billion.

Both firms' boards of directors unanimously approved the transaction, which they expect to close in the third quarter.

HFF has closed more than $800 billion in 27,000-plus transactions since 1998. The firm closed 2,587 transactions last year, leading to more than $650 million in revenue, making 2018 the firm's best year financially.

JLL said the move will allow it to rapidly scale its U.S. capital markets presence, provide HFF clients access to JLL's global platform and create a platform to attract, develop and retain staff in the commercial real estate industry.

ChristianUlbrich"Increasing the scale of our capital markets business is one of the key priorities in our 'Beyond' strategic vision to drive long-term sustainable and profitable growth," said JLL Global CEO Christian Ulbrich. "The combination with HFF provides a unique opportunity to accelerate growth."

HFF CEO Mark Gibson will join JLL as CEO, Capital Markets, Americas and Co-Chair of the JLL Global Capital Markets Board. He said the transaction will give existing HFF shareholders an immediate cash payment and the opportunity to participate in the long-term value of the combined company. "In addition, we believe the combination with JLL will create a superior platform for our shareholders, clients and employees than either company would have independent of the other and will significantly accelerate our firm's strategic plan," Gibson said.

Under the agreement announced Tuesday, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share they own. Based on JLL's $163.02 March 18 stock closing price, the cash and stock consideration HFF shareholders will receive at closing equals $49.16 per HFF share, a 25 percent premium compared to the firm's weighted-average share price over the last 90 trading days and a 6 percent premium over HFF's March 18 stock price. JLL said it intends to fund the purchase's cash portion with cash reserves and its existing syndicated credit facility.

Upon closing, JLL shareholders will own 87 percent of the combined company and HFF shareholders will own 13 percent. All seven HFF Executive Committee members agreed to vote their shares, which represent 3 percent ownership of HFF, in favor of the transaction. JLL said it anticipates adding one existing HFF director to JLL's Board of Directors.

JP Morgan served as exclusive financial advisor and Sidley Austin LLP as legal counsel for JLL. Morgan Stanley & Co. LLC acted as exclusive financial advisor for HFF and Dechert LLP as legal counsel.

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