JLL to Acquire HFF in $2 Billion Deal

The two companies reported this morning the transaction has been unanimously approved by the boards of directors of both companies. Mark Gibson, CEO of HFF, will join JLL as CEO, Capital Markets,

Christian Ulbrich, Global CEO of JLL

CHICAGO—Commercial brokerage firm JLL in a move to significantly expand its capital markets presence has entered into a definitive agreement to acquire HFF, Inc. in a cash and stock transaction with an equity value of approximately $2 billion.

The two companies reported this morning the transaction has been unanimously approved by the boards of directors of both companies. Mark Gibson, CEO of HFF, will join Chicago-based  JLL as CEO, Capital Markets, Americas and co-chair of JLL’s Global Capital Markets Board.

“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. The combination with HFF provides a unique opportunity to accelerate growth and establish JLL as a leading capital markets intermediary, with outstanding capabilities,” says Christian Ulbrich, Global CEO of JLL.

The brokerage firm states that the acquisition of HFF will significantly bolster its full-service capital markets services to clients. The transaction will allow JLL to rapidly scale its U.S. capital markets presence, accelerate growth of its debt advisory business in Europe and Asia Pacific and drive increased operating efficiency globally.

JLL intends to fund the cash portion of the purchase price consideration with a combination of cash reserves and its existing syndicated credit facility. The combination is expected to deliver significant run-rate synergies, estimated at approximately $60 million over two to three years, JLL reported.

The transaction is expected to close in the third quarter of 2019. The transaction is not contingent upon receipt of financing.  JP Morgan is serving as exclusive financial advisor for JLL, and Sidley Austin LLP as legal counsel. Morgan Stanley & Co. LLC is acting as exclusive financial advisor for HFF, and Dechert LLP as legal counsel. International law firm Proskauer was retained by  Morgan Stanley in the JLL-HFF acquisition. The Proskauer deal team consisted of Jeffrey Horwitz, Daniel Ganitsky and Kunal Dogra.

“This is a terrific transaction for our shareholders, providing them with an immediate cash payment and the opportunity to participate in the long-term value of the combined company,” said HFF’s Gibson. “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.”

Under the terms of the agreement, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share. Based on the closing price of JLL stock of $163.02 on March 18, 2019, the cash and stock consideration to be received by HFF shareholders at closing is valued at $49.16 per HFF share.

Upon closing of the transaction, JLL shareholders are expected to own approximately 87% of the combined company, and HFF shareholders are expected to own approximately 13%.

Since 1998, Dallas-based HFF has closed more than $800 billion in more than 27,000 transactions, achieving record revenue in 2018 of more than $650 million.