Leading diversified professional services and investment management
company, Colliers (NASDAQ and TSX: CIGI), announced today it has
entered into an agreement to make a strategic investment in Basalt
Infrastructure Partners LLP (“Basalt”), a leading transatlantic
infrastructure investment management firm with more than $8.5
billion of assets under management. The transaction is subject to
customary closing conditions and approvals and is expected to close
in the second half of 2022. Financial terms were not disclosed.
With offices in London and New York, Basalt
specializes in mid-market, infrastructure equity investments across
the utility, transportation, energy/renewables, and communications
sectors in Europe and North America. Since its inception in 2011,
Basalt has consistently delivered superior returns to investors
across its flagship series of closed-end funds and counts among its
investors some of the world’s largest public and corporate pension
plans, sovereign wealth funds, endowments, insurance firms, and
family offices.
As part of the transaction, Colliers will
acquire 75% of Basalt from its founders and a significant
third-party financial investor. The senior leadership team will
retain 25% of the equity and will continue to lead the organization
under Colliers’ unique partnership model. Basalt will also admit
four additional members of its senior leadership team to the
partnership. Once the transaction is completed, Colliers expects
the annual run rate of management fee revenue to be between $65 and
$70 million, Adjusted EBITDA of $35 to $40 million, and operating
results to be significantly accretive.
“Partnering with Basalt’s impressive leadership
team builds upon our success with Harrison Street and complements
the rest of our investment management platform,” said Zach Michaud,
Co-Chief Investment Officer of Colliers. “Infrastructure, an asset
class which we know well, has high barriers to entry, low
volatility, and strong tailwinds. It is also a segment that will
see increased investor allocations, especially for high-quality
investment platforms like Basalt and Harrison Street. The
opportunity to leverage everything we have to offer while providing
our investors with greater choice when it comes to differentiated
investment products is very compelling.”
“This is another example of an experienced and
entrepreneurial investment team choosing to partner with Colliers,”
said Jay Hennick, Chairman and Chief Executive Officer of Colliers.
“Basalt’s culture aligns perfectly with our own and we are
delighted to welcome this world-class team to our
organization.”
“Our partnership with Colliers strengthens
Basalt for the long term and enhances our ability to continue
delivering superior investment returns for our investors. Colliers
is a permanent capital strategic partner that gives our partners,
professionals, and investors stability and increased alignment over
the long term,” said Rob Gregor, Basalt Co-Founder and Managing
Partner. “The relationship will also strengthen our global
capabilities, offer unique market knowledge and relationships, and
create important synergies to accelerate our growth. Colliers’
entrepreneurial culture, decentralized management style,
significant inside ownership, and exemplary investment record over
more than two decades were also important factors. On behalf of our
entire team, we look forward to leveraging these advantages as we
continue to build Basalt in the years to come.”
In connection with this transaction, Berkshire
Global Advisors acted as financial advisor to Basalt.
About Colliers
Colliers (NASDAQ, TSX: CIGI) is a leading
diversified professional services and investment management
company. With operations in 65 countries, our more than
15,000 enterprising professionals work collaboratively to provide
expert advice to real estate occupiers, owners, and investors. For
more than 26 years, our experienced leadership with
significant insider ownership has delivered compound annual
investment returns of almost 20% for shareholders. With annualized
revenues of $3.6 billion ($4.0 billion
including affiliates) and $46 billion of assets under
management, we maximize the potential of property and accelerate
the success of our clients and our people. Learn more
at corporate.colliers.com,
Twitter @Colliers or LinkedIn.
About Basalt
Basalt is the exclusive investment advisor to
the Basalt funds, comprising Basalt I, Basalt II, and Basalt III.
The Basalt funds are infrastructure equity investment funds
focusing on mid-market investments in utilities, power, transport,
and communications infrastructure in North America and Europe.
For more information, please visit
www.basaltinfra.com.
Forward-looking Statements
This press release includes forward-looking
statements. Forward-looking statements include the Company’s
financial performance outlook and statements regarding goals,
beliefs, strategies, objectives, plans or current expectations.
These statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results to be materially
different from any future results, performance or achievements
contemplated in the forward-looking statements. Such factors
include: economic conditions, especially as they relate to
commercial and consumer credit conditions and consumer spending,
particularly in regions where our business may be concentrated;
commercial real estate property values, vacancy rates and general
conditions of financial liquidity for real estate transactions;
trends in pricing and risk assumption for commercial real estate
services; the effect of significant movements in average
capitalization rates across different property types; a reduction
by companies in their reliance on outsourcing for their commercial
real estate needs, which would affect revenues and operating
performance; competition in the markets served by the Company; the
ability to attract new clients and to retain major clients and
renew related contracts; the ability to retain and incentivize
producers; increases in wage and benefit costs; the effects of
changes in interest rates on the cost of borrowing; unexpected
increases in operating costs, such as insurance, workers’
compensation and health care; changes in the frequency or severity
of insurance incidents relative to historical experience; the
effects of changes in foreign exchange rates in relation to the US
dollar on the Company’s Canadian dollar, Euro, Australian dollar
and UK pound sterling denominated revenues and expenses; the impact
of pandemics on client demand for the Company’s services, the
ability of the Company to deliver its services and the health and
productivity of its employees; the impact of global climate change;
the impact of political events including elections, referenda,
trade policy changes, immigration policy changes, hostilities and
terrorism on the Company’s operations; the ability to identify and
make acquisitions at reasonable prices and successfully integrate
acquired operations; the ability to execute on, and adapt to,
information technology strategies and trends; the ability to comply
with laws and regulations related to our global operations,
including real estate and mortgage banking licensure, labour and
employment laws and regulations, as well as the anti-corruption
laws and trade sanctions; and changes in government laws and
policies at the federal, state/provincial or local level that may
adversely impact the business.
Additional information and risk factors are
identified in the Company’s other periodic filings with Canadian
and US securities regulators (which factors are adopted herein and
a copy of which can be obtained at www.sedar.com). Forward looking
statements contained in this press release are made as of the date
hereof and are subject to change. All forward-looking statements in
this press release are qualified by these cautionary statements.
Except as required by applicable law, Colliers undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Non-GAAP Measures
Adjusted EBITDA is defined as net earnings,
adjusted to exclude: (i) income tax; (ii) other expense (income);
(iii) interest expense; (iv) depreciation and amortization; (v)
acquisition-related items (including contingent acquisition
consideration fair value adjustments, contingent acquisition
consideration-related compensation expense and transaction costs);
(vi) restructuring costs and (vii) stock-based compensation
expense. We use adjusted EBITDA to evaluate our own operating
performance and our ability to service debt, as well as an integral
part of our planning and reporting systems. Additionally, we use
this measure in conjunction with discounted cash flow models to
determine the Company’s overall enterprise valuation and to
evaluate acquisition targets. We present adjusted EBITDA as a
supplemental measure because we believe such measure is useful to
investors as a reasonable indicator of operating performance
because of the low capital intensity of the Company’s service
operations. We believe this measure is a financial metric used by
many investors to compare companies, especially in the services
industry. This measure is not a recognized measure of financial
performance under GAAP in the United States, and should not be
considered as a substitute for operating earnings, net earnings or
cash flow from operating activities, as determined in accordance
with GAAP. Our method of calculating adjusted EBITDA may differ
from other issuers and accordingly, this measure may not be
comparable to measures used by other issuers.
We use the term assets under management (“AUM”)
as a measure of the scale of our Investment Management operations.
AUM is defined as the gross market value of operating assets and
the projected gross cost of development properties of the funds,
partnerships and accounts to which we provide management and
advisory services, including capital that such funds, partnerships
and accounts have the right to call from investors pursuant to
capital commitments. Our definition of AUM may differ from those
used by other issuers and as such may not be directly comparable to
similar measures used by other issuers.
COMPANY CONTACTS:
Christian Mayer Chief Financial
Officer (416) 960-9500
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