C&W Becomes Favourite To “Acquire” Aguirre Newman

16 May 2017 – El Confidencial

The most awaited marriage in recent times in the real estate sector looks like it is about to come to fruition. Aguirre Newman has chosen a favourite in its sales process, which it has delegated to Atlas, as El Confidencial revealed: the offer submitted by Cushman & Wakefield (C&W).

The firm led in Spain by Oriol Barrachina has presented the best offer, ahead of those submitted by Savills and Colliers, and its dream of becoming the new giant in the country, and of competing with CBRE and JLL for the leadership of the market, is starting to look like a real possibility, given that the merger of the two consultancy firms would create a giant with almost 670 employees.

Moreover, if the conversations between the two firms end up becoming reality, C&W will also take a step forward in its plans to grow in size in order to debut on the stock market, an option that it has been analysing since the beginning of the year. A year and a half ago, the consultancy firm completed a global merger with DTZ, and it is now aspiring to undertake another integration, in this case, in the domestic arena.

Sources at Aguirre Newman point out that “it is an open process, there are several options and interests in the running and nothing has been agreed. The company is continuing to analyse alternatives”. Amongst others, how to convert an operation that is theoretically an acquisition into a merger.

It has been precisely this question that has brought Stephen Newman closer to the posture being adopted by Santiago Aguirre, given that differences existed between the two partners regarding the benefit of initiating a sales process. Internally, the operation is viewed more like a merger and, in any case, it will require the agreement of the two partners to go ahead, given that together they control 75% of the share capital.

In fact, one of the elements that differentiates Cushman’s offer, according to market sources, is that, in addition to a juicy financial proposal, the firm has been much more flexible in terms of ensuring the continuity of the “Aguirres” and their decision-making power within the newly merged company.

With more than 400 professionals, revenues of €80 million and a gross operating profit (EBITDA) of €12 million, Aguirre Newman has been valued at between €80 million and €100 million. But its success story – it is the only Spanish firm that competes against the large multi-national firms – is going through a critical time for generational and business reasons, which was ultimately what triggered the sales process.

The fact that it is exclusively a domestic firm means that it is being left out of many projects, since large companies prefer to work with consultancy firms that can offer them international support, a growing trend in the face of the globalisation of the economy and that impediment is limiting the current structure of the Spanish firm.

An example of how the market is changing is the very sales process involving Aguirre Newman, given that the offers from both C&W and Savills, i.e. the two most important, are being led from London, according to sources familiar with the deal.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake