What Fueled JLL’s Acquisition of HFF?

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Jay Koster

According to Jay Koster, JLL expects more than $ 1 billion in transactions to be executed every working day.

DALLAS – Earlier this month, Jones Lang LaSalle Incorporated completed the acquisition of HFF, which is now wholly owned by JLL and some of its subsidiaries and will operate as JLL. This acquisition was first announced and unanimously approved by each company's board of directors in March 2019, and approved by HFF shareholders earlier this month.

The purchase price was approximately $ 1.8 billion and consisted of a combination of cash and JLL stock. JLL financed the cash portion of the purchase price consideration with a combination of cash reserves and the existing syndicated credit facility. The combination is expected to provide significant run-rate synergies estimated at approximately $ 60 million over two to three years.

Prior to the acquisition, HFF had 2018 sales of more than $ 650 million and approximately 1,050 employees. The combined global team will consist of more than 3,700 capital markets professionals in 47 countries.

At the time of closing, JLL announced that the acquisition will expand its ability to provide capital markets services and expertise to its clients. In fact, it aligns with one of the main priorities of JLL Beyond's strategic vision, namely the growth of the US capital markets business and the long-term sustainable and profitable growth of JLL worldwide. This initiative was launched two years ago.

Indeed, the transaction significantly expands JLL's capital markets business into a full-service capital market platform. JLL combined capital markets services include stock placement, fund placement, loan sales, lending, corporate finance and net leasing, agency loans, business advisory services on mergers and acquisitions, investment advice and debt placement.

In seeking ways to grow capital markets, JLL realized that each goal must be closely aligned with its culture and strategic vision. As a result, GlobeSt.com learns that the company is confident that the acquisition of HFF meets these criteria and is the best opportunity for JLL.

"The power of this combination makes us an industry leader in the capital markets," Jay Koster, group leader for Americas Capital Markets and Investor Services, JLL, told GlobeSt.com. “With a network of more than 3,700 capital market employees in 47 countries, we expect to execute transactions worth more than $ 1 billion every working day. As our capital markets business evolves, our promise to our customers remains the same: best-in-class service over the entire life cycle of their investments. "

GlobeSt.com learns that the integration process is underway and the company recognizes that creating a unit of this size that is also one of the most connected consultants in the world is a transformative, complex process.

HFF common stock, previously trading under the ticker symbol HF, has ceased trading and was delisted from the NYSE effective July 1. Upon completion of the acquisition, Mark Gibson, former CEO of HFF, will join JLL as CEO, Capital Markets, Americas and Co. Chairman of the Global Capital Markets Board.

"The feedback from our customers, brokers and shareholders has been overwhelmingly positive," said Gibson. “Joining JLL marks an exciting new chapter in our history. It offers a tremendous opportunity for our team to join a full service real estate company with a global presence and a customer-centric culture of collaboration that closely aligns with our own. We look forward to working together to grow JLL's capital markets business and provide expanded services to our clients. "

Ultimately, the combination of both companies' complementary investments in technology further strengthens JLL's digital capabilities and strengthens its position as a digital leader with client tools, team connectivity and access to data that enables customer information.

As an example of the technology component that JLL is committed to, the company introduced JiLL last month. With the AI-powered conversation smartphone app, employees can streamline their work and work more productively. Users can use voice or text to chat with the app and simplify time-consuming daily tasks, such as For example, setting up meetings, finding colleagues, looking up lunch menus or shuttle schedules, submitting service requests, or finding a desk or conference room.

JiLL was developed in JLL Labs' Silicon Valley Hub in Menlo Park, CA. JiLL takes proprietary data and insights from JLL's experience with customers and physical spaces and combines them with Google Cloud solution technology, including Google Cloud Platform, Dialogflow and Kubernetes containers.

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