The Real Deal New York

Newmark sells for less than rumored estimate

BGC Partners pays $63M in cash, plus stock

October 20, 2011 04:10PM
By Adam Pincus


From left: Howard Lutnick, CEO of BGC, Barry Gosin, CEO of
Newmark and Jeff Gural, principal at Newmark Knight Frank

Howard Lutnick’s BGC Partners is paying $63 million in cash and $2.3 million in stock for Newmark & Company Real Estate, BGC said in a filing with the Securities and Exchange Commission last week.

BGC could pay an additional 4.83 million shares, which today have a value of $33.38 million, to Newmark shareholders, if certain incentive goals are reached, the company said.

BGC closed Friday on the acquisition of Newmark including the company’s majority interests in 13 affiliated companies around the United States. Newmark, whose partners include CEO Barry Gosin and principal Jeffrey Gural, is known as Newmark Knight Frank in the U.S., and is affiliated with the global brokerage Knight Frank, based in London. BGC announced in April it would buy Newmark. At the time, the purchase price was rumored to be between $125 million and $200 million.

Using the $6.91 share price of the stock at the closing this past Friday, the maximum sale price of the brokerage was $98.7 million. That includes the $63 million in cash plus 339,000 shares of stock, equal to $2.3 million, and the maximum of 4.83 million shares over five years, equal to $33.38 million.

“The former shareholders of Newmark will also be entitled to receive up to an additional approximately 4.83 million shares of stock over a five-year period if Newmark achieves certain enumerated gross revenue targets post-closing,” the release said. BGC will buy the non-controlling interest in the remaining Newmark offices around the country at a later date, the firm said.

BGC, through a spokesperson, declined to comment.

Joseph Harbert, COO of the New York office of global commercial firm Cushman & Wakefield, said he was not familiar enough with the economics of the deal to comment on it, but noted Newmark has flourished in its hometown.

“Newmark has done well in New York,” Harbert said. “Barry [Gosin] has built a good local firm that is very competitive.”

5 Responses to “Newmark sells for less than rumored estimate”

  1. February 21, 2012 at 12:51 pm, NYC real estate pros expect BGC Partners’ purchase of Grubb & Ellis to stabilize foundering firm – insiderater.com said:

    [...] BGC is in an expansion mode, with the October 2011 purchase of the American portion of the firm Newmark Knight Frank, which had about 474 brokers, for $63 million plus stock. [...]

  2. February 21, 2012 at 6:12 pm, Columbus Investment Properties » Blog Archive » NYC real estate pros expect BGC Partners’ purchase of Grubb & Ellis to … said:

    [...] BGC is in an expansion mode, with the October 2011 purchase of the American portion of the firm Newmark Knight Frank, which had about 474 brokers, for $63 million plus stock. [...]

  3. February 29, 2012 at 9:06 pm, Acquisition of Grubb & Ellis | BCG Partners | Bankruptcy said:

    [...] par, and is lending up to $4.8 million in additional funds to keep Grubb solvent. BGC Partners bought Newmark Knight Frank last October for $63 million plus [...]

  4. February 29, 2012 at 10:04 pm, Creditors win brief delay in BGC’s move to buy Grubb & Ellis « « TEAM3P TEAM3P said:

    [...] par, and is lending up to $4.8 million in additional funds to keep Grubb solvent. BGC Partners bought Newmark Knight Frank last October for $63 million plus [...]

  5. March 12, 2012 at 10:14 am, Acquisition of Grubb & Ellis | BCG Partners | Bankruptcy | Посты said:

    [...] par, and is lending up to $4.8 million in additional funds to keep Grubb solvent. BGC Partners bought Newmark Knight Frank last October for $63 million plus [...]

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