SYDNEY, Nov 6 (Reuters) - TPG Capital Management LP said it completed the $1.1 billion purchase of Australian engineering firm UGL Ltd’s DTZ property arm, ending a years-long process that was undermined by questions about payments to the Hong Kong leader when he worked there.
Sydney-based UGL put DTZ on the market in early 2013 in a bid to cut debt and focus on its core engineering business. In June it said it would sell the unit to United States private equity giant TPG in a deal then expected to settle in September.
But the deal came under scrutiny after Australian media revealed Hong Kong Chief Executive Leung Chun-ying received more than $6.4 million in payments from UGL relating to its purchase of DTZ, where Leung had worked.
TPG had sought a full explanation of the payments, sources told Reuters, while UGL maintained the payments were industry standard and largely structured by the vendors of the business. Leung’s office also denied wrongdoing.
Finalising the deal enables UGL to focus on its core mining and industrial services operations, pay down debt and restore investor faith in its corporate governance. It also gives TPG one of the world’s largest property companies, because DTZ itself in September said it would buy U.S. property services firm Cassidy Turley.
“The combination of DTZ’s strong businesses in Asia and Europe, its existing businesses in the United States and Cassidy Turley’s market leading business in the United States, will create a global, full service property services company that will be top three in the sector,” TPG’s managing partner for Asia Ben Gray said in a statement.
TPG and Hong Kong-based private equity firm PAG, together with co-investor Ontario Teachers’ Pension Plan, teamed up to buy DTZ from UGL.
UGL’s Sydney-listed shares closed 0.4 percent lower at A$6.90 ($5.92) on Wednesday. (1 US dollar = 1.1650 Australian dollar) (Reporting by Byron Kaye, editing by David Evans)
Our Standards: The Thomson Reuters Trust Principles.