After the transaction closes, CBRE will own 70 percent of the Turner & Townsend/CBRE project management joint venture, with Turner & Townsend partners owning the remaining 30 percent. CBRE acquired a 60 percent ownership stake in Turner & Townsend in November 2021. Since then, Turner & Townsend’s sales have grown at a compounded rate of more than 20 percent.
CBRE’s entire project management business, including Turner & Townsend, produced approximately $3 billion in net revenue in 2023. From 2021, combined net revenues grew at a double-digit annual rate with approximately 15 percent net profit. The net synergies resulting from the combination of the two businesses are expected to generate approximately $0.15 of incremental operating earnings per share by the end of 2027, which is expected to grow over time. The cost of the Turner & Townsend/CBRE project management incremental investment is approximately $70 million, excluding transaction costs.
Bob Sulentich, CBRE’s Chairman and CEO said:
Combining our project management businesses will create an offering that is unmatched in scope and breadth of capabilities, with more than 20,000 employees serving clients in more than 60 countries.
“Strong secular trends, particularly increased spending on infrastructure, green energy and employee experience, are catalysts for the growth of this business and we are well positioned to capitalize on this significant opportunity.”
The combined business will be led by Vincent Clancy, chairman and CEO of Turner & Townsend, who will continue to report to a CBRE-controlled board of directors composed of senior CBRE and Turner & Townsend executives.
“Vince is an exemplary leader who has led Turner & Townsend to great success,” said Mr. Sulentic.
“Bringing CBRE’s extensive resources and global project management capabilities under Vince will strengthen our value proposition for clients and advance our growth ambitions.”
Vincent ClancyThe Chairman and CEO of Turner & Townsend said:
Our ambition since joining forces with CBRE in 2021 has been to create a world class, differentiated program, project and cost management capability.
“We have made extraordinary progress toward this goal, and our revenue and profit have grown significantly over the past three years. Turner & Townsend’s momentum will continue to grow as we combine two great businesses into one integrated, pure-play project management capability. Our combined depth of talent and resources , global footprint, industry expertise and commitment to excellence will be second to none in project and program management.”
CBRE’s board of directors intends to appoint Mr. Clancy to CBRE’s board of directors following the closing of the transaction.
“Vince will bring to our board a global perspective and deep experience in key growth areas such as renewable energy and infrastructure. We look forward to his insights and contributions,” said Mr. Sulentic.
Starting in 2025, CBRE intends to report project management results in a new segment separate from Global Workplace Solutions to provide greater transparency to investors.
Turner & Townsend operates globally in three business segments, Real Estate – serving investors and tenants in all types of real estate, including data centers and life sciences; infrastructure – especially transport and aviation; and energy and natural resources – including renewable energy, alternative fuels and liquefied natural gas.
The transaction is expected to close around the end of the year, subject to satisfaction of regulatory and other customary conditions and the completion of required consultations with employment boards in certain jurisdictions.