One of China’s leading real estate companies China Vanke has bought a 4.9% stake in advisory firm Cushman & Wakefield in the run-up to its initial public offering (IPO).
In June it emerged that the global advisory firm has filed preliminary paperwork with the US Securities and Exchange Commission for an IPO expected to raise around $1 bn (€0.8 bn). The flotation is expected in the first week of August.
The SEC documents have subsequently been updated in relation to Vanke, a spokesperson for Cushman & Wakefield said. 'We have agreed to sell shares in Cushman & Wakefield at the IPO price to Vanke Services, a subsidiary of China Vanke. They are expected to own 4.9% of the company after the IPO, representing an approximately $175 mln investment. We couldn’t be happier to have Vanke Services as a strategic partner and we look forward to working together to further our leading positions across Greater China.'
Cushman has agreed to sell 10.2 million shares in the company through a private placement. The company has set target pricing for its IPO between $16 and $18 per share. Cushman’s current owners – TPG Capital, PAG Asia Capital and the Ontario Teachers’ Pension Plan – are expected to hold around 66% of the company following the IPO, according to SEC documents.
Earlier this year, media reports said the brokerage was interviewing advisers to help it go public, which could see the firm valued at more than $5 bn, according to sources. Rival CBRE is worth around $16 bn.
The real estate services company was acquired for $2 bn by DTZ in 2015, bankrolled by private equity firm TPG, to create the third-biggest global property brokerage behind CBRE and JLL.
Cushman currently has about 400 offices in 70 countries, according to its IPO registration statement. Its revenue reached $6.92 bn in 2017, up from $6.2 bn in 2016. CBRE made $14.2 bn last year, while JLL's revenue was $7.9 bn.
Cushman & Wakefield has changed hands several times since its incorporation in 1917. Previous owners include media empire RCA Corp and the Rockefeller Group.