GVA — the Birmingham based property consultancy — has named the global engineering and services group Bilfinger as a potential merger partner. Shareholders of both firms will have to approve the deal before the amalgamation can go ahead.
No financial terms have been disclosed, but subject to legal clarification and a shareholder vote a contract exchange is expected before the end of June. Under the terms so far hammered out within a “memorandum of understanding” all of GVA’s existing shares will be transferred to Bilfinger Real Estate, effectively giving it 100 per cent ownership of the British agency.
At the same time the merger will allow LDC — which has a 27 per cent stake in GVA — to withdraw. The private equity house’s initial investment supported the company through a financial restructuring programme and helped GVA secure access to external capital to undertake large acquisitions.
Bilfinger, based in Mannheim and listed on the Frankfurt stock exchange, employs 74,000 staff throughout its 14 worldwide divisions. Its latest global turnover was €8.5bn. The Bilfinger group is structured into four business segments: industrial, power, construction and building and facility. Within building and facility sits Bilfinger Real Estate with some 1,500 property professionals supporting operations in Germany, UK, the Netherlands, Switzerland, Turkey, Poland, Canada and Australia.
The German conglomerate’s property division has particular expertise in commercial and asset management and said it was committed to growing its transactional capability on its existing client base that includes RBS, Morgan Stanley, Credit Suisse, AXA, Union Investment and IVG.
The decision to work with Bilfinger Real Estate follows the completion of a review by investment bank Canaccord Genuity, which began in late 2013, and examined GVA’s options to enhance its medium to long-term growth.
Rob Bould is chief executive at GVA. “This strategic merger launches us onto the global stage, creating a partnership with Bilfinger Real Estate that immediately competes with the world’s biggest real estate advisers for global mandates,” he said. It was, he added, “a significant and transformational milestone” in GVA’s history.
“The combination of the established GVA platform and reputation, and Bilfinger Real Estate’s global reach and resources, creates a challenger brand in the European and global real estate market that is consultancy based. The creation of a new, leading brand also allows us to recruit and retain the best staff,” Bould promised.
In Newcastle, where GVA employs 50 people, the consultancy’s senior regional director Michael Cuthbertson added: “The service we provide our clients will very much remain the same. There will be no change to our team structures or to our office locations. Nor will our brand, which represents huge capital value, change immediately.
“The GVA brand will evolve over a matter of years, not months. However, it’s equally critical to convey that our partnering with Bilfinger Real Estate combined with LDC’s exit will offer a hugely exciting opportunity for clients and an unprecedented prospect for us to create a truly international dimension to our UK-facing business.”
For Bilfinger Real Estate, its chief executive, Aydin Karaduman, said: “This deal is part of a strategic plan to develop a leading international real estate consultancy and management offer with representation in every major commercial centre in the world.”
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