CBRE is launching a $400m (£302m) acquisition vehicle to help it take advantage of takeover opportunities.
Documents for an initial public offering in the US from CBRE Acquisition Holdings, a so-called “blank cheque company” set up to buy other businesses, highlight “target companies that will benefit from CBRE’s scale and market insights”.
The company added: “Our strategy is to identify and acquire a privately held company with significant growth potential and to create value by supporting the company in the public markets.”
Although the company has yet to identify or start discussions with potential takeover targets, it added: “We are well positioned to identify and execute an acquisition with a company that will benefit from CBRE’s industry expertise, access, scale and broad network of client and supplier relationships, which a financial sponsor could not easily replicate.
“In addition to our management team, we intend to leverage CBRE’s global business leaders, who have a long history and demonstrated track record of sourcing high-quality acquisition targets across the real estate industry.”
The company said it will look for targets that have benefited from outsourcing trends, a growing adoption of real estate data and an increasing focus on real estate occupiers’ health and wellbeing.
CBRE chief executive Bob Sulentic will chair CBRE Acquisition Holdings, with William Concannon, CBRE’s global group president for clients and business partners, acting as chief executive.
Dry powder
In CBRE’s third-quarter earnings call, Sulentic said Covid-19 is “putting downward pressure on parts of our business and creating larger opportunities in other parts”.
Discussing the outlook for industry M&A, he added: “We are pretty excited about what’s out there for us right now, but I will say we are going to be patient. We are not going to run out just because we have the dry powder we have, because we’re in a low point in the market cycle, and buy up a bunch of stuff unless we think we can integrate it well.”
Chief financial officer Leah Stearns said: “Our current pipeline is actually larger than we could reasonably entertain in any one quarter. So we are being very cognisant of the opportunity set that we have. We want to make sure that we have sufficient dry powder to act quickly, if we find the right opportunity.”
As the coronavirus pandemic rocks markets and rumours mount of companies becoming takeover targets, the number of vehicles set up to make such acquisitions has soared.
So far in 2020, more than 170 special purpose acquisition companies have completed IPOs in the US, raising more than $63bn, according to SPACInsider, a news and data service that tracks the market.
That marks at least a decade high for the number of such IPOs and the combined equity raised through the deals.
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