Solid foundations

16 June 2014 By Una Galani Follow @ugalani

Australia’s UGL is selling the property services group to pay down debt. New private equity owners TPG and PAG Asia bring capital and management expertise. That could be enough to allow DTZ to challenge rivals CBRE and Jones Lang LaSalle, which are more than twice its size.

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Australia’s UGL Limited announced on June 16 a binding agreement to sell its property services unit to a private equity consortium for A$1.21 ($1.14 billion) in cash.

The acquirers are TPG Capital, PAG Asia Capital, and the Ontario Teachers’ Pension Plan.

Brett White, former chief executive of CBRE Group, is also investing alongside the consortium and will become the executive chairman of DTZ in March 2015. CBRE is the world’s largest real estate services firm.

UGL said it was evaluating a range of options for the net proceeds which it expects to be at least A$1 billion after capital gains tax and other sale costs.

It expects to resume dividend payments in the 2015 financial year.

UGL announced the appointment of Ross Taylor as the company’s new chief executive. Taylor was previously chief executive of Tenix, a privately held engineering and construction company.

DTZ has operations in 52 countries.

Shares in UGL closed up 0.58 percent at A$6.98 on June 16.

Goldman Sachs advised UGL on the sale.

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