Private equity is dominating the auction of Cushman & Wakefield, according to two sources.
The sale of the real estate services firm is in the first round, the people said. Goldman Sachs and Morgan Stanley are advising on the auction.
The Agnelli family owns 81 percent of Cushman & Wakefield and doesn’t want to sell the company to a direct competitor, the Wall Street Journal reported in February. Exor, the family’s investment arm, is also letting Cushman handle its own sales process, the New York Times said.
Buyout shops and one strategic, DTZ, are bidding for Cushman, the sources said. DTZ, a property services firm, was acquired by TPG Capital, PAG Asia Capital and Ontario Teachers’ Pension Plan in November.
It’s unclear which private equity firms are interested in Cushman & Wakefield.
In March, Cushman said it had designated a strategic review committee, chaired by President and CEO Edward Forst, to oversee a review of potential strategic alternatives for the company. Cushman confirmed that Goldman and Morgan Stanley were hired. “There can be no assurance that the review of potential strategic alternatives will result in any transaction,” Cushman said in a statement.
Cushman, which is based in New York, reported $175.4 million in 2014 adjusted EBITDA. The company is expected to sell for more than 9x, or roughly $2 billion.
Selling Cushman to a strategic would be “messy,” one of the sources said. “There are a lot of negative synergies when you put together two investment businesses,” the person said. “Yes, there are costs savings, but also lots of breakage.”
One strategic not involved in the auction is CBRE Group Inc. Los Angeles-based CBRE, a commercial real estate services and investment firm, is a competitor to Cushman. On Tuesday, CBRE agreed to buy the Global WorkPlace Solutions business of Johnson Controls for $1.475 billion.
Executives for Cushman & Wakefield and Exor declined comment. DTZ, Goldman and Morgan Stanley could not be reached for comment.
Photo courtesy of Shutterstock