DALLAS - CBRE Group, Inc. (NYSE:CBRE), the world's largest commercial real estate services and investment firm, with a market capitalization of $37.17 billion and trailing twelve-month revenue of $34.31 billion, has announced the acquisition of Industrious National Management Company, LLC, a leading provider of flexible workplace solutions. The transaction, which is expected to close later this month, will see CBRE acquiring the remaining equity stake in Industrious for approximately $400 million, implying an enterprise valuation of around $800 million. According to InvestingPro data, CBRE has demonstrated strong momentum with a 30.54% price return over the past six months.
This acquisition is part of a broader strategic move by CBRE to create a new business segment named Building Operations & Experience (BOE). The BOE will integrate building operations, workplace experience, and property management to offer scalable solutions for a variety of facilities, including offices and data centers. The move is aimed at preparing CBRE for future-ready office and facility operations on a global scale.
Jamie Hodari, CEO and co-founder of Industrious, will join CBRE as the CEO of the new BOE segment and will also serve as Chief Commercial Officer. Vikram Kohli, CBRE's Chief Operating Officer, has been promoted and will assume the additional role of CEO, Advisory Services, overseeing the company's largest business segment.
The acquisition is expected to be immediately accretive to CBRE's 2025 core EBITDA and free cash flow. Industrious has experienced significant growth since 2021, with a compound annual revenue growth rate of over 50% and an expansion to more than 200 locations across over 65 cities. CBRE's own financial strength is evident in its current EBITDA of $2.21 billion and healthy current ratio of 1.13, indicating strong liquidity to support this expansion. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks including CBRE.
Bob Sulentic, CBRE's chair and CEO, expressed confidence in the new segment and the leadership team, emphasizing the strategy to invest in resilient businesses with strong growth prospects. Hodari echoed the sentiment, highlighting the transformative potential of the BOE segment for building operations and the value it will create for users and owners alike.
CBRE's new structure for 2025 will include four business segments: Advisory Services, Building Operations & Experience, Project Management, and Real Estate Investments. The company plans to provide historical financial results under this new structure with its fourth-quarter 2024 earnings release.
The information in this article is based on a press release statement from CBRE Group, Inc.
In other recent news, CBRE Group has experienced a series of noteworthy developments. Evercore ISI has lowered the stock target for CBRE Group by 4% to $141.00, citing the impact of bond yield volatility on investment sales revenue. Despite this, the firm maintains an Outperform rating on the stock. On the other hand, Goldman Sachs has initiated coverage on CBRE Group with a Buy rating and a 12-month price target of $176.00, highlighting the company's strong capital allocation and growth potential.
CBRE Group has also appointed Adam Gallistel and Andy Glanzman as Co-Chief Executive Officers of its Investment Management division. This strategic move is aimed at strengthening leadership within the company's investment management sector. Furthermore, the company has launched a $3.5 billion commercial paper program to enhance its financial flexibility.
Citi analysts have responded positively to these developments, raising CBRE's target price to $160 and maintaining a Buy rating. These recent developments demonstrate CBRE Group's ongoing commitment to growth and shareholder value.
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