CBRE Update 02/05/24

CBRE Group, Inc. Expands Public Sector Capabilities with Agreement to Acquire J&J Worldwide Services

CBRE Group, Inc. has announced a definitive agreement to acquire J&J Worldwide Services, a leading provider of engineering services, base support operations and facilities maintenance for the U.S. federal government, from Arlington Capital Partners, a Washington, D.C.-area private investment firm specializing in government regulated industries.

The initial purchase price is $800 million in cash, plus a potential earn-out of up to $250 million, payable in 2027, subject to the acquired business meeting certain performance thresholds. In 2024, J&J is projected to produce more than $525 million of revenue and approximately $65 million of EBITDA1, continuing its recent track record of low double-digit annual growth. Additionally, CBRE expects to benefit from tax attributes and synergies arising from the transaction. The acquisition is expected to be accretive to CBRE’s earnings in 2024.

J&J primarily serves the U.S. Department of Defense through long-term, fixed-price contracts. The company employs more than 3,300 people worldwide, serving more than 250 hospitals, clinics and military installations primarily in the United States as well as in Europe, Asia, the Caribbean, and the Middle East.

“The acquisition is consistent with key elements of our M&A strategy that focus on enhancing our technical services capabilities, increasing revenue resilience and secular growth and expanding our government client base within Global Workplace Solutions,” said Bob Sulentic, chair & chief executive officer of CBRE. “We are adding a company with deep government contracting experience, long-term customer relationships and a 50-year record of outstanding technical service delivery.”

J&J serves as a trusted partner to U.S. federal civilian and defense agencies delivering mission-critical services across three business lines:

  • Healthcare and Medical Solutions, serving such institutions as Brooke Army Medical Center and Walter Reed National Military Medical Center
  • Mission Support Solutions, serving the United States Naval Academy and such military bases as the U.S. Naval Station, Rota, Spain
  • Engineering Solutions, which provides services ranging from architectural, mechanical, electrical, plumbing and fire protection for Naval Medical Center Portsmouth and the Naval Support Facility Diego Garcia and others.

Steve Kelley, chief executive officer of J&J Worldwide Services, said: “Becoming part of CBRE provides J&J a great opportunity to continue building upon and expanding the solutions we provide our military customers at mission-critical facilities around the world. Arlington Capital Partners provided the industry expertise and guidance needed to scale our solutions at an unrivaled pace and prepare us for continued growth. We are excited about combining our capabilities and track record with CBRE’s to enhance our commitment to serving those that serve our nation.”

Closing of the acquisition is subject to obtaining applicable regulatory clearances and other customary closing conditions. Closing is expected in the coming months.

Citi is acting as financial advisor and Simpson Thacher & Bartlett LLP and ArentFox Schiff LLP are acting as legal advisors to CBRE. J.P. Morgan Securities LLC is acting as financial advisor to J&J and Sheppard Mullin Richter & Hampton LLP as legal advisor to J&J and Arlington Capital Partners.

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