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NEW YORK CITY-FTI Consulting Inc. has signed a definitive agreement to acquire the Schonbraun McCann Group in a transaction valued at approximately $125 million, of which approximately $100 million is in cash and approximately $25 million is in restricted FTI stock. In addition, there will be the opportunity for additional consideration if earnings exceed certain targets over the next five years.

According to a prepared statement, locally based SMG has a high percentage of recurring revenue from major real estate clients. In recent years, the company has advised on transactions including: SL Green on its $6 billion acquisition of Reckson Associates Realty Corp.; Beacon Capital Partners on its $6.4 billion acquisition of office properties in Seattle and Washington, DC; Broadway Partners on its $4.7 billion acquisition of 14 office properties; Gale International on its $30 billion master development of Songdo City, South Korea; Mack-Cali on its $600 million acquisition of the Bellemeade portfolio; and many recent REIT IPOs including Douglas Emmett, Northstar Realty, and Gramercy Capital.

SMG managing partner Bruce Schonbraun will join FTI as a senior managing director and group leader of its Real Estate Practice. In addition, SMG brings 170 professionals to FTI, 11 of whom will become senior managing directors. SMG will operate and function as the Real Estate Division of FTI within the company’s Corporate Finance Sector.

Schonbraun tells GlobeSt.com that “every day, we help our real estate clients conceive, develop and implement strategies for growth and we have a profound understanding of the various ‘fuel’ sources for that growth. With this transaction with FTI, we implemented a strategy for the Schonbraun McCann Group’s own growth and continued success.”

Schonbraun continues that as part of FTI Consulting, “SMG can take its growth, which to this point has been organic, to a new level. The global reach of FTI mirrors what our real estate clients are doing–investing in and developing projects around the world.” He further noted that as of this deal, SMG effectively has a presence in 50 major business centers throughout Europe, Asia, the Middle East and the Americas.

He tells GlobeSt.com that the transaction also “allows both FTI and SMG to enhance each other’s strengths in restructuring services and real estate respectively to assist companies positioned for restructuring and those opportunistic buyers who have ready capital to invest in the current environment. It’s really a win-win-win for SMG and FTI, as well as our corporate and real estate clients, alike.”

Jack Dunn, president and CEO of FTI says in a prepared statement that “SMG brings three important attributes to FTI. First, SMG is the leading and most recognized provider of premium, value added services to the real estate industry–an industry that comprises almost 12% of the US GDP. Second, SMG’s practice continues to expand the portion of our business that is based on a recurring revenue model from important clients. Similar to our strategic communications business which has approximately 70% of revenue from retainer-based clients and our hosting business in the technology group, SMG will provide consistency and stability to our future revenues and earnings. Third, SMG and FTI will benefit from our combined ability to drive growth in Europe and Asia where SMG’s intellectual capital and demonstrated expertise in real estate coupled with FTI’s existing practices should open significant new channels for growth.”

Dunn adds that now is a particularly opportune time to join practices with SMG. “The precipitous decline in liquidity in the global financial system is creating stress in the real estate market and driving demand for conflict resolution, restructuring and strategic counsel from even the strongest players. Furthermore, in markets such as these there is often a transfer of wealth from those shedding their holdings to opportunistic buyers with the foresight and financial strength to invest in a down cycle. With its access to the capital markets, strong relationships with strategic investors and deep expertise in real estate restructuring, valuation, complex financial transactions, tax planning and financing, SMG expands our capacity and capabilities to provide the most robust advice and opportunistic financing to our clients both domestically and abroad as they confront these challenges.”

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