CBRE Group Inc. announced that the company plans to combine its project management business with Turner & Townsend, its majority-owned subsidiary that provides program management, cost consultancy and project management services globally.
Upon closing the transaction, CBRE will own 70% of the combined Turner & Townsend/CBRE Project Management business, with the Turner & Townsend partners holding the remaining 30%. CBRE acquired a 60% ownership interest in Turner & Townsend in November 2021. Since then, Turner & Townsend has grown revenue at a compound rate of more than 20%.
CBRE’s entire project management business, including Turner & Townsend, produced net revenue of approximately $3 billion in 2023. Since 2021, combined net revenue has grown at a double-digit annual rate with an approximately 15% net profit margin. The net synergies derived from bringing the two businesses together are expected to generate approximately $0.15 of incremental run-rate core EPS by the end of 2027, an amount that is expected to grow over time. The cost of the incremental investment in Turner & Townsend/CBRE Project Management is approximately $70 million, exclusive of deal costs.
“Unifying our Project Management business will create an offering that is unmatched for its scale and breadth of capabilities, with more than 20,000 employees serving clients in over 60 countries,” said Bob Sulentic, CBRE chair and chief executive officer. “Powerful secular trends, particularly increased spending on infrastructure, green energy and employee experience, are growth catalysts for this business and we are well-positioned to capitalize on this significant opportunity.”
The combined business will be led by Vincent Clancy, Turner & Townsend’s chief executive officer, who will continue to report to a board controlled by CBRE and comprised of senior executives from both CBRE and Turner & Townsend. The CBRE Board of Directors intends to appoint Clancy to the CBRE Board upon closing the transaction.
Turner & Townsend operates across three business segments globally: Real Estate — serving investors and occupiers across all property types, including data centers and life sciences; Infrastructure — notably transport and aviation and Energy and Natural Resources — including renewable energy, alternative fuels and liquified natural gas.
The transaction is expected to close around year-end.
