What does Brett White have to do to get Cushman & Wakefield IPO-ready?

Former CBRE boss must cut debt, boost assets under management

TRD New York /
Sep.September 24, 2015 08:34 AM

Brett White, the freshly-minted CEO of Cushman & Wakefield, has his work cut out for him.

Analysts predict that Cushman, after a $2 billion merger with DTZ, is gearing up for an IPO, given a white-hot commercial property market driving share prices of competitors CBRE and JLL to record highs. But to get the company there, White will have to reduce debt, improve margins and boost revenues.

The IPO is the obvious next stop for the company as well as a logical exit plan for the private equity group that orchestrated Cushman and DTZ’s merger, a group that includes TPG, PAG Asia Capital and the Ontario Teachers’ Pension Plan, the Wall Street Journal reported.

“Recognizing where we are in the cycle, they’re going to have to get this thing out there,” Brandon Dobell, an analyst with financial-services firm William Blair & Co, told the newspaper.

But first, Cushman needs to reduce its debt. It owes 5.2 times its earnings before interest, taxes, depreciation and amortization, compared to 2.5 times for White’s old company, CBRE, according to Moody’s Investors services.

The firm is also looking to expand its “recurring” revenues, from evergreen businesses such as consulting and facilities management, White told the journal. Cushman has just $12 billion in assets under management, compared with $88.4 billion for CBRE and $57.2 billion for JLL. Only 21 percent of Cushman’s revenues flowed from these business lines in 2014, compared to CBRE’s 31 percent.

But White, whom The Real Deal profiled in its September issue, is optimistic.

“I would not have gone back to run a company were it not a combination as exciting and compelling as this one,” he said. [WSJ]Ariel Stulberg


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