Savills Regulatory News (SVS)

1 Aug 2007 07:02

Savills PLC01 August 2007 SAVILLS ACQUIRES US FIRM GRANITE PARTNERS LLC FORMS FOUNDATION FOR SAVILLS' EXPANSION INTO THE US MARKET 1st August 2007 Savills plc ("Savills"), the international property services company, is pleasedto announce today that it has acquired Granite Partners LLC ("Granite"), a USreal estate investment banking firm. Savills is paying an initial considerationof $54.0m, of which 75% is payable on completion. The remainder is subject to afive year earn-out, such that the total consideration payable for Granite iscapped at $84.6m, dependent on the achievement of EBITDA over a two year futureperiod. In addition to the earn-out, long-term incentive arrangements have beenput in place to help with employee retention. This is being funded from Savills'cash balances. Granite is a New York-based real estate investment banking firm owned primarilyby its partners. Founded in 1996 by John D. Lyons and Gerard V. Mason, thecompany offers investment sales, debt and equity placement and advisory servicesfocusing on commercial property throughout the US. Granite undertakestransactions in the United States, Canada and the Caribbean basin and has workedfor a number of high-profile clients including Babcock & Brown, BlackstoneGroup, General Electric Capital Corp., Goldman Sachs Archon/Whitehall, HealthCare Property Investors, Inc., ING/Clarion, JPMorgan and Morgan Stanley. Prominent transactions undertaken by Granite include the sale of the leaseholdinterest in the office and retail premises located within Washington D.C.'sUnion Station for $160 million; representation of the Lightstone Group in its$889m acquisition of Prime Group Realty Trust, a NYSE-listed REIT; and the saleof the Enron World Headquarters building in Houston, Texas on behalf of EnronCreditors for $50 million. Granite currently employs a team of 18 professionals. They have a range ofdiverse real estate backgrounds and have executed over $21 billion of realestate transactions spanning the full range of property types, including office,medical office, retail, multifamily, industrial and hotels. Following thecompletion of this deal Granite will be re-branded Savills Granite withimmediate effect. For year ended 31 December 2006, Granite's turnover was $15.4m; EBITDA was$8.9m. Gross assets at that date were US$9.4m. As a result of Savills' stateddesire to build its presence in the US, further considerable investment inGranite is likely to be undertaken and therefore the acquisition of Granite isexpected to be broadly earnings neutral for Savills' earnings in 2008. This acquisition is in line with Savills' strategy to invest directly inoperations in the US following the dissolution of the company's strategicalliance with the Trammell Crow Company. John Lyons of Granite will undertake the role of Savills Chief Executive ofNorth America, and Simon Hope of Savills will assume responsibility for thismarket at board level. Aubrey Adams, Chief Executive of Savills, said: "We are delighted to welcome the management and staff of Granite to SavillsGroup as our new US acquisition. This is an important development for Savillsand is in line with our strategy of having a presence in the key globalfinancial centres and follows on from our major expansion in recent years inEurope and Asia. "We have taken our time in finding the right US partner. I am convinced that inGranite we have found an excellent partner that gives us a first-class entrancepoint into the US market. By entering the US market Savills now has strengthenedits presence globally." Simon Hope, Executive Director of Savills, adds: "We see Granite as the ideal fit for our first US office due to an outstandingcultural synergy, New York City location, access to capital markets and strongleadership which will carry the business forward. We see this acquisition asplacing Savills on the map in the US and we have exciting expansion plans forthe business under the leadership of John and his team. "The US market is highly competitive and we are looking forward to theopportunities it provides and the challenges it will raise. We have anexcellent team in Europe and Asia, who will be working closely with Granite tointegrate them into our global network so that we can provide a widergeographical service to our clients." John D. Lyons of Granite commented: "By joining forces with Savills, Granite will expand further our client basewhile enhancing our capacity to serve existing clients both in the United Statesand abroad. Our association with Savills will provide Granite clients withgreater access to global capital markets. As a unified entity, Savills Granitewill stand as a formidable US base of operations for one of the world's leadingreal estate services firms." For further information, please contact: Savills Tel: +44 20 7409 9923Aubrey AdamsSimon Hope Granite Partners LLC Tel: +1 212-328-2800John D. Lyons Citigate Dewe Rogerson Tel: +44 20 7638 9571Sarah GestetnerGeorge Cazenove Analyst Conference call There will be an analyst conference call at 9.00am on 1st August 2007 hosted byAubrey Adams. If you are dialling from the UK, please call 0800 953 1444 If you are dialling from the US, please call 1866 220 1452 If you are dialling from outside the UK or US, please call +44 (0) 1452 542 300 Please note that participants will be asked for the conference ID number whichis 11538884. Editor's Notes: Savills Savills is a leading global real estate service provider listed on the LondonStock Exchange. The company established in 1855, has a rich heritage with unrivalled growth. Itis a company that leads rather than follows, and now has over 180 offices andassociates throughout the Americas, Europe, Asia Pacific, Africa and the MiddleEast. A unique combination of sector knowledge and entrepreneurial flair give clientsaccess to real estate expertise of the highest calibre. We are regarded as aninnovative-thinking organisation backed up with excellent negotiating skills.Savills chooses to focus on a defined set of clients, therefore offering apremium service to organisations with whom we share a common goal. Savills takesa long-term view to real estate and works hard to invest in long term andstrategic relationships and is synonymous with a high quality service offeringand a premium brand. Granite Headquartered in New York City, Granite Partners is a private real estateinvestment banking firm specializing in investment sales and equity and debtfinancing. The company also provides real estate advisory and consultingservices. The diverse group of Granite professionals has been responsible formore than $16 billion in real estate transactions for clients throughout theUnited States and abroad, including Goldman Sachs Archon/Whitehall, CalPERS,First Industrial Real Estate Trust, J.P. Morgan Investment Management, HealthCare Property Investors, Inc., GE Healthcare Finance, AEW, Colonial PropertiesTrust, Oaktree Capital Management, Blackstone Partners and Simon Properties,among others. This information is provided by RNS The company news service from the London Stock Exchange