JUNE 20, 2018 || RANDYL DRUMMER Cushman & Wakefield Files for Long- Awaited IPO Updated: Backed By Private Equity Giants, Global Real Estate Firm Follows Newmark in Tapping Public Markets to Fund Growth

After more than a year of market speculation, Cushman & Wakefield on Wednesday filed a registration statement with the U.S. Securities and Exchange Commission for an initial public offering.

The Chicago-based firm founded in 1917 submitted a confidential filing in April and has not yet disclosed the number of shares it expects to offer or selected an exchange or ticker symbol. Greenwich, CT-based Renaissance Capital, which specializes in researching newly public companies worldwide, estimated the offering could raise $500 million, while other reports said the company could take in up to $1 billion, with a total valuation of more than $5 billion.

A Cushman & Wakefield spokesman Wednesday declined to comment beyond the registration statement.

Cushman & Wakefield, which reported revenue of $6.9 billion in 2017, has about 48,000 employees around the world in about 400 offices in 70 countries. The company manages roughly 3.5 billion square feet of commercial space.

Credit: Cushman & Wakefield Cushman & Wakefield is led by Executive Chairman and Chief Executive Brett White, who spent 28 years at Cushman rival CBRE, where he served as president from 2001 to 2005 and CEO from 2005 until stepping down in 2012. John Forrester is the company's global president. He previously was chief executive, EMEA at DTZ prior to the merger with Cushman & Wakefield.

The company was established in its current form in 2014 when private equity firms TPG Capital, PAG Asia Capital and the Ontario Teachers’ Pension Plan Board acquired property services firm DTZ from UGL Limited. At the end of 2014, the firm's principal shareholders acquired and Cassidy Turley and combined it with DTZ.

Finally, in 2015, the investment backers bought Cushman & Wakefield from Italian investment firm Exor and other investors, opting to keep the Cushman & Wakefield name.

Reports first surfaced in March that Cushman had resumed talks with investment bankers, with a potential filing in June or July.

In the filing, Cushman said it would use proceeds from the offering to repay debt, including deferred payments from the Cassidy Turley acquisition. TPG, PAG Asia Capital and the Ontario Teachers Pension Plan Board, which now own more than 90% of the company's shares, would continue to control a majority interest after the offering is completed. Prior to the closing of the proposed offering, Cushman & Wakefield plans to restructure to a public limited company incorporated in England and Wales, to be named Cushman & Wakefield plc.

The firm is tapping public markets following a period of rapid growth punctuated by a string of annual net losses following its 2014 acquisition from Exor. Yearly revenue has jumped each year, from $4.2 billion in 2015 to $6.2 billion in 2016, to $6.9 billion in 2017, according to the filing.

Cushman also reported annual net losses of $473.7 million, $449 million and $220.5 million during the same period. According to a March 2015 release by Exor, Cushman generated revenue of $2.85 billion and earnings of $61.6 million in 2014, both records for the company.

With help from a record first quarter, both the total number of initial public offerings and proceeds are up sharply in 2018, with the 84 IPOs so far this year raising $25.1 billion, according to Renaissance Capital.

Real estate companies make up about 3% of the total offerings this year, with the largest being a $1.2 billion IPO by VICI Properties, a Spring Valley, NV-based real estate investment trust specializing in casino properties; and a $725 million offering by cold-storage provider Americold Realty, both launched in January.

The last real estate services firm to test the market was Newmark Knight Frank and parent BGC Partners, which completed an initial public offering for the launch of Newmark Group, Inc. (Nasdaq: NMRK) last December, the first commercial real estate services firm to go public since the June 2015 IPO of Colliers International Group, Inc.

Newmark Group debuted at $13.95 per share on Dec. 15 and traded as high as $16.66 in February before settling into the $13.50-$15 range over the last few months. However, the company had to sharply downsize its offer size and pricing amid weak initial response from investors. Newmark shares closed Wednesday at $14.78, up nearly 6% from the company's public debut.

In its filing, Cushman made the case that the timing for an IPO is solid as the real estate market's bull market continues. The global commercial property industry is projected to grow 5% per year to more than $4 trillion through 2022, outpacing overall business growth. Cushman & Wakefield and other large global providers are poised to continue to grow market share by acquiring and rolling up smaller competitors.

Morgan Stanley, JPMorgan, Goldman Sachs and UBS will lead the offering, assisted by Barclays, BofA/ML, Citi, Credit Suisse, William Blair and TPG Capital BD.

Editor's note: This update includes an estimate by Renaissance Capital of the IPO's potential pricing.