(Reuters) - Real estate services provider Jones Lang LaSalle Inc said on Tuesday it will buy capital markets services provider HFF Inc in a cash-and-stock deal valued at about $2 billion.
HFF shareholders will get $24.63 in cash and 0.1505 JLL shares for each share held, for a total offering price of $49.16 per share, representing a premium of 5.7 percent to HFF's Monday close. (reut.rs/2OdCi21)
Shares of HFF were up 6.9 percent at $49.72 in early trading on Tuesday, while JLL shares were marginally down.
Acquisition of HFF will allow JLL to rapidly scale its U.S. capital markets presence and accelerate growth of its debt advisory business in Europe and Asia Pacific, the companies said.
HFF provides financial services to commercial real estate companies, including advisory services, investment banking, structured financing and the closing and maintenance of loans.
JLL intends to fund the cash portion of the deal with a mix of cash reserves and its existing credit facility.
The deal, which is expected to close in the third quarter of 2019, will be accretive to adjusted earnings per share for the combined company in the first full financial year after completion.
The combined company is expected to deliver savings of $60 million over two to three years after the deal closes.
JLL shareholders are expected to own about 87 percent of the combined company and HFF shareholders the remaining 13 percent.
All seven executive committee members of HFF, representing 3 percent ownership of the company, have agreed to vote their shares in favor of the transaction, the companies said.
After the deal goes through, JLL expects to add one of HFF’s existing directors to its board.
JP Morgan was JLL’s financial adviser and Sidley Austin LLP legal counsel. Morgan Stanley & Co LLC was financial adviser for HFF and Dechert LLP legal counsel to HFF.
Reporting by Bharath Manjesh in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli