By Peter Grant
CBRE Group Inc., the world's largest commercial real-estate
services company, is negotiating to buy the division of Johnson
Controls Inc. that manages 1.8 billion square feet of corporate
real estate globally, according to a person familiar with the
matter.
The price couldn't be determined. But analysts have estimated
the value of the division--named Global Workplace Solutions--was
between $600 million and $1.5 billion. It accounted for about 10%
of the Milwaukee-based company's $42.7 billion in sales in the
fiscal year that ended Sept. 2013.
Johnson Controls announced last year it had hired Bank of
America Merrill Lynch to divest the division, which it has owned
for more than 20 years, because it didn't fit with its core
businesses. Chief executive Alex Molinaroli has been focusing,
instead, on York-brand heating and air-conditioning equipment for
commercial buildings, and on devices for monitoring and regulating
electricity usage, temperature, fire safety and security.
A spokesman for Johnson declined to comment except to say:
"We're still in the process of divesting our Global Workplace
Solutions business." A spokesman for CBRE declined to comment.
CBRE's talks to buy the division come at a time of increasing
mergers and acquisition activity in the commercial real-estate
services business. Cushman & Wakefield Inc. recently hired an
adviser to put that firm on the block. Also, Toronto-based
FirstService Corp. announced plans to spin off its commercial
real-estate unit, Colliers International, as a separate publicly
traded company. And private equities firm TPG Capital has acquired
Chicago based DTZ and Washington-based Cassidy Turley and merged
those two firms together.
Bob Tita contributed to this article
Write to Peter Grant at peter.grant@wsj.com
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