What Fueled JLL’s Acquisition of HFF?
In looking at opportunities to grow capital markets, JLL was clear that any target would need to closely align with its culture and strategic vision, and it is confident the acquisition of HFF meets these criteria.
DALLAS—Earlier this month, Jones Lang LaSalle Incorporated closed its acquisition of HFF, which is now wholly owned by JLL and certain of its subsidiaries, and will do business as JLL. This acquisition was first announced and unanimously approved by each company’s board of directors in March 2019 and received approval from HFF’s shareholders earlier this month.
The acquisition price was approximately $1.8 billion, consisting of a combination of cash and JLL stock. JLL funded 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 for two to three years.
Prior to the acquisition, HFF had more than $650 million in revenue in 2018 and approximately 1,050 employees. The combined global team will consist of more than 3,700 capital markets professionals across 47 countries.
At the time of closing, JLL stated that the acquisition expands its ability to provide capital markets services and expertise to its clients. In fact, it aligns with one of the key priorities of JLL’s Beyond strategic vision, which is to grow its US capital markets business, and drive long-term sustainable and profitable growth for JLL globally. This initiative was rolled out two years ago.
Indeed, the transaction does significantly expand JLL’s capital markets business into a full-service capital markets platform. The combined JLL capital markets services include equity placement, funds placement, loan sales, loan servicing, corporate finance and net lease, agency lending, mergers and acquisition corporate advisory, investment advisory and debt placement.
In looking at opportunities to grow capital markets, JLL was clear that any target would need to closely align with its culture and strategic vision. Thus, GlobeSt.com learns that the firm is confident the acquisition of HFF meets these criteria and is the best opportunity for JLL.
“The power of this combination makes us an industry leader in the capital markets space,” Jay Koster, group head, Americas Capital Markets and Investor Services, JLL, tells GlobeSt.com. “With a connected network of more than 3,700 capital markets employees in 47 countries, we expect to execute more than $1 billion in transactions every working day. While our capital markets business is evolving, our promise to our clients remains the same: best-in-class service throughout the entire lifecycle of their investments.”
GlobeSt.com learns that the integration process is underway, and the firm acknowledges that creating an entity of this size that is also one of the most world’s most connected advisors is a transformative, complex process.
HFF’s common stock, which previously traded under the ticker symbol HF, has ceased trading and was delisted from the NYSE effective July 1. With the acquisition complete, Mark Gibson, former CEO of HFF, joins JLL as CEO, Capital Markets, Americas and co-chair of its global capital markets board.
“The response from our clients, brokers and shareholders has been overwhelmingly positive,” said Gibson. “Joining JLL marks an exciting new chapter in our history. It provides our team a tremendous opportunity to join a full-service real estate firm with a global presence and a client-centric collaborative culture that closely aligns with our own. We look forward to working together to grow JLL’s capital markets business and bring expanded services to our clients.”
Finally, the combination of both companies’ complementary investments in technology further strengthens JLL’s digital capabilities, reinforcing its position as a digital leader with client tools, team connectivity and access to data that enables client insights.
As an example of the technology component that JLL is championing, the firm introduced JiLL last month. The AI-powered conversational smartphone app can help employees streamline work and be more productive. Users can use voice or text to converse with the app and simplify time-consuming daily tasks such as setting up meetings, locating colleagues, looking up lunch menus or shuttle schedules, filing service requests or finding a desk or conference room.
JiLL was developed in the JLL Labs Silicon Valley hub in Menlo Park, CA. JiLL uses proprietary data and insights from JLL’s experience with clients and physical spaces, and combines them with Google cloud solutions technology, including Google Cloud Platform, Dialogflow and Kubernetes containers.