Cushman & Wakefield IPO Yields $765M

After the second-largest initial public offering for a real estate services company, the firm will use proceeds to pay down debt and pursue its growth strategy.
John Forrester, Cushman & Wakefield
John Forrester, Cushman & Wakefield

“Elated. Exhausted,” is how John Forrester, president of Cushman & Wakefield Inc., felt on the afternoon of the commercial real estate services firm’s initial public offering on August 2, according to comments he made to Commercial Property Executive. The company, now officially named Cushman & Wakefield plc and trading on the New York Stock Exchange under the symbol CWK, raised $765 million in the IPO.

Cushman & Wakefield, a company with $6.9 billion in revenue in 2017 and a staff of roughly 48,000 employees in 70 countries, sold 45 million ordinary shares to the public at a price of $17.00 per share. The offering was 3.5-times oversubscribed and, as Forrester noted, marked the second-biggest IPO ever in real estate services.

Cushman & Wakefield, NYSE bell ringing
Cushman & Wakefield, NYSE bell ringing

The IPO comes three years after Cushman & Wakefield merged with competitor DTZ—which had just merged with Cassidy & Turley—to become one of the largest commercial real estate services firms in the world. “Bringing those three companies together, we had to invent a new company and then we started doing everything in the way we thought world-class businesses of the future were going to do things,” Forrester said. “It allowed us to leapfrog all of our peer groups. And once we finished that, we got back to our business of growing the company.”

It was work that paved the way for another major move: going public. “With our great revenue growth seen all through 2017 and 2018 to date, our great infrastructure and great numbers—it’s just the right time for us,” he added.

Partial view from the outside

Upon Cushman & Wakefield’s June 20 filing of a registration statement for its IPO, some industry watchers were quick to question the company’s decision, pointing to certain risk factors it had conceded to, including indebtedness. In the filing, Cushman & Wakefield noted that it would direct approximately $470 million in proceeds from the IPO to reduce indebtedness. The plan remains intact; Forrester confirmed that proceeds will be utilized to pay down indebtedness. “We will actually be quite strong. We’ll have a lot of liquidity,” he continued.

Forward looking

Cushman & Wakefield stands to pocket additional funds, as the company granted the underwriters a 30-day overallotment option of up to an additional 6,750,000 ordinary shares, which would yield $114.8 million.

With the IPO in the rearview mirror, Cushman & Wakefield is bullish about the next period and expects to continue to see growth. “Our business is robust in terms of its new mix that has recurring revenue, contract-based revenue. We have very strong cash flow and we also have a very strong market position,” Forrester concluded. “The headlines are: the company’s in fantastic shape; it’s got the best management in the whole industry, everybody knows that; the hiring we’re doing; and we’re taking market share right across the world.”

Images courtesy of Cushman & Wakefield