Complementary Cultures, Opportunity to Increase Services Drove Merger, JLL’s Roberts Says
- Jun 17, 2008
Peter Roberts, Jones Lang LaSalle’s CEO of the Americas, said the complementary cultures of the two firms was a major reason behind the merger of Jones Lang LaSalle and The Staubach Co., which was announced Monday evening. The desire of clients to deal with one service provider was also another strong reason for the two companies to combine, he said. “What drove this was our clients’ needs, and the opportunities it will create for our people,” Roberts (pictured) noted. “We saw the opportunity to serve our clients with one global platform.” Talks with Staubach intensified over the last six months, Roberts said. Plans to integrate the two companies have begun in earnest, but will not be implemented until the deal closes, slated for this year’s third quarter. Roberts predicted the combination will be successful because key Staubach executives will be actively involved in the firm. Roger Staubach, who founded The Staubach Co. 31 years ago, will join Jones Lang LaSalle’s board of directors, while Greg O’Brien, Staubach’s CEO, will become CEO of brokerage, Americas, heading the new brokerage division. John Gates, currently Staubach’s president & COO, will serve as president of brokerage, Americas. In a note on the transaction, analysts Brandon Dobell and Robert Riggs of William Blair & Co., said “tenant representation accounted for 8 percent (approximately $215 million) of Jones Lang LaSalle’s 2007 consolidation revenue and would account for roughly 16 percent (just under $500 million) on a pro forma basis.” Corporate tenants are demanding a full range of services from their service providers today, O’Brien said. He noted that Staubach does not have a facilities management division, while Jones Lang LaSalle does. And, while Staubach does have a design and construction division of 120 employees, Jones Lang LaSalle’s division encompasses 1,300 employees. Jones Lang LaSalle’s global presence is also increasingly attractive to corporate clients, many of whom are focused on expanding globally, O’Brien said. The industry at large sat up and took note of last night’s deal. “First and foremost, I want to congratulate these companies on this deal,” said Brett White, president & CEO of CB Richard Ellis Inc. “They are two terrific companies.” White went on to call Roger Staubach an “icon” in the industry. The transaction underscores the desirability of industry consolidation, he said, and also proves that the tenant-only representation model is “not particularly compelling.” “I think the industry will be better for it,” said Jeff Turner, executive vice president of Duke Realty Corp. The firm’s south regional offices are in Dallas, and Turner has worked extensively with both companies. “There has been a lot of thought put into this. The whole is greater than the sum of the parts, and who would understand that better than Roger Staubach?” The merger opens up a market opportunity for Studley, the tenant representation firm, according to the firm’s president, Michael Colacino. “Industry consolidation brings clarity,” he said. “If you looked at Staubach’s Website, and ours, they were very similar. The fewer people who do what we do, the better we like it.”Zaya Younan, chairman & CEO of Younan Properties, an office building owner, also was positive about the combination. “It will help us to have a single point of contact for all of our needs, rather than having to deal with two different companies that have two different philosophies.” He said the company will provide “strong competition” to CB Richard Ellis.