News

Forst wins backing for C&W sale

News

Jack Sidders

27 February 2015

Investment/finance

The former Goldman Sachs banker who was appointed as chief executive of Cushman & Wakefield in December 2013 has won the backing of the agent’s owners to seek a buyer for the company.

Exor SpA, the investment arm of the Agnelli family, which owns a majority stake in C&W, has approved Edward Forst’s plan to appoint Goldman Sachs and Morgan Stanley to advise on a sale.

The move comes after Forst carried out a review of the company which concluded its best prospects for growth lay in new ownership.

The bankers have been tasked with finding a buyer that is not one of C&W’s competitors.

This is because the company has already held detailed talks with several potential agency suitors and has concluded that a significant part of its value
lies in the preservation of its brand.

The private equity-led consortium which took DTZ private last year has encouraged Exor that a sale to an investor at a premium to the price it paid for Cushman & Wakefield close to the peak of the last property cycle should be possible.

The Agnellis initially paid $565.4m (£285.5m at the time of the deal) for a 67.5% stake in C&W in 2006, before increasing their holding to 81%.

The company posted substantial losses in the wake of the acquisition as the global real estate market crashed, but has since recovered strongly.

Its pretax profits for the 12 months to September 2014 were £105.2m and the company is expected to show further growth at its next results in March.

Based on the 10-times-earnings multiple applied to some recent agent takeovers, the company could be valued at more than £1bn.

It is expected that the Agnelli family may look to retain a stake in the business if it fails to achieve a satisfactory level of bids.

A spokesman for C&W said: “As is the normal course of business, both Cushman & Wakefield and Exor continually seek ways to further enhance the businesses, create value and further accelerate their plans.

“There is currently no transaction to disclose, nor guarantee that such a review may result in any transaction involving Cushman & Wakefield.”

The former Goldman Sachs banker who was appointed as chief executive of Cushman & Wakefield in December 2013 has won the backing of the agent’s owners to seek a buyer for the company. Exor SpA, the investment arm of the Agnelli family, which owns a majority stake in C&W, has approved Edward Forst’s plan to appoint Goldman Sachs and Morgan Stanley to advise on a sale. The move comes after Forst carried out a review of the company which concluded its best prospects for growth lay in new ownership. The bankers have been tasked with finding a buyer that is not one of C&W’s competitors. This is because the company has already held detailed talks with several potential agency suitors and has concluded that a significant part of its value lies in the preservation of its brand. The private equity-led consortium which took DTZ private last year has encouraged Exor that a sale to an investor at a premium to the price it paid for Cushman & Wakefield close to the peak of the last property cycle should be possible. The Agnellis initially paid $565.4m (£285.5m at the time of the deal) for a 67.5% stake in C&W in 2006, before increasing their holding to 81%. The company posted substantial losses in the wake of the acquisition as the global real estate market crashed, but has since recovered strongly. Its pretax profits for the 12 months to September 2014 were £105.2m and the company is expected to show further growth at its next results in March. Based on the 10-times-earnings multiple applied to some recent agent takeovers, the company could be valued at more than £1bn. It is expected that the Agnelli family may look to retain a stake in the business if it fails to achieve a satisfactory level of bids. A spokesman for C&W said: “As is the normal course of business, both Cushman & Wakefield and Exor continually seek ways to further enhance the businesses, create value and further accelerate their plans. “There is currently no transaction to disclose, nor guarantee that such a review may result in any transaction involving Cushman & Wakefield.”