The company is acquiring Dallas-based Staubach in a $613 milliondeal, as previously reported by More than 60% of theacquisition payments will be made in a deferred payment structure,Martin says. If certain growth objectives are not met, some of thedeferred payments can be delayed up to 12 months, she says. Thedeal also calls for potential earn-out payments that are subject toperformance metrics over a four-and-a-half year period after theclosing. "The earn-out opportunity of $114 million commences asearly as 2011 and it is based on performance incentives that are analignment of our two merged tenant representational organizationsto work successfully together," Martin said during the call.

The merger "is the premier US brand in tenant representation,"Dyer says. Approximately 85% of Staubach's revenue comes fromtenant representation. Staubach is expected to have revenue of $375million at the end of its current fiscal year, which ends June 30,Martin says. "The four-year compound annual growth rate is 15% forthe last four years," Dyer says. Staubach employs 1,000professionals, of which about 700 are revenue producing.

The merger will diversify the firm's revenue and is appealingbecause the tenant representation revenue is not dependent oncapital markets, Martin says. "One of the aspects that the tenantrepresentation offers is that you have a very large amount of justannuity characteristics to it because leases just have acontractual life," she says. "At the end of that, a tenant needs tomove or stay or do something, all of which generates a feeopportunity." The merger will help the firm "against the capitalmarkets weakness," Martin adds.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.