* TPG consortium includes Ontario Teachers' Pension Plan and
* DTZ's revenue rose 18 percent in six months ended December
* UGL shares are down 3.8 pct so far this year, vs 4.8 pct
fall in benchmark index
(Adds details on Australian buyout deals)
By Stephen Aldred
HONG KONG, June 13 A TPG Capital Management-led
consortium has agreed to buy the property arm of Australian
engineering services firm UGL Ltd for A$1.215 billion
($1.14 billion), a source told Reuters on Friday.
UGL put the unit DTZ, a real estate services company, for
sale to cut debt as its main engineering services division faces
declining revenues due to a slowdown in the Australian mining
A deal is expected to be signed as early as Friday, bringing
to a close a year-long sale process that has attracted interest
from a number of private equity bidders including U.S. buyout
firm Warburg Pincus.
The sale also underscores the return of strong buyouts
market in Asia, spurred by easy credit markets and capital
flowing into the region's private equity firms.
As a result, private equity-backed M&As have got off to
their best-ever start, with $26.7 billion in deals announced so
far this year. That is 21.6 percent more than the whole of 2013,
according to Thomson Reuters data.
Private equity firms have invested nearly three times as
much in Asia year-to-date as they did in the same period last
year, the same data shows.
DTZ provides real estate brokerage and facilities management
services, and has operations in Australia, China and the United
States. It reported an 18 percent rise in revenue in the six
months ended December.
UGL's gearing, as expressed by long-term debt to total
capital, is nearly three times the industry average, according
to Thomson Reuters data.
UGL shares are down 3.8 percent so far this year, compared
with a 4.8 percent drop in benchmark Australian index.
TPG has been working on the deal to buy UGL since February
last year, said the source, who declined to be identified as the
deal was private.
Dallas-headquartered TPG is seen tapping more co-investment
deals around Asia from its recently closed $3.3 billion Asia
fund. The firm previously brought Shanghai Fosun Pharmaceutical
into its $461 million buyout of U.S.-listed China
healthcare firm Chindex International Inc.
TPG's consortium partners include Hong Kong private equity
firm PAG and Canada's Ontario Teachers' Pension Plan (OTTP), the
UGL was not available for immediate comment, while TPG and
PAG declined to comment. OTPP could not be immediately reached
($1 = 1.0620 Australian Dollars)
(Reporting by Stephen Aldred; Additional reporting by Byron
Kaye in SYDNEY; Editing by Denny Thomas and Ryan Woo)