To capitalize on the growing opportunities in the Pacific region and add strength to its corporate real estate services platform, CBRE Group, Inc. (CBG) has acquired Australian firm Paragon Project Management Pty Ltd. The acquisition also brings on board Paragon’s national team of 26 experts.
Paragon’s acquisition is a strategic fit, given its expertise in working for both the owners and occupiers of space in Australia and New Zealand across all project areas. Over the last 25 years, the company has offered a number of consultancy services to the building and construction industry, with offices in Sydney, Brisbane and Perth.
Paragon’s credentials involve assignments for managing the fit-out of BHP Billiton’s 35-floor occupancy in Brookfield Place, Perth; workspace projects for ANZ, Canon and Fairfax Media in Sydney and the ABC South Bank Studios in Brisbane, among several others. This acquisition hence would help CBRE grow its Global Corporate Services business, in particular.
The experts from Paragon will be incorporated into CBRE’s current Project Management division in Pacific. This combined operation will hire 70 project management professionals, with the integrated CBRE Project Management team led by Paragon founder Ian Rea.
Strategic buyouts have played a major role in the expansion of CBRE’s geographic coverage as well as its service offerings. Recently, the company announced its acquisition of U.S. Equities Realty’s U.S.-based operations and consequent merging of their respective Chicago businesses. U.S. Equities has been a major player, accomplishing deals with companies like Ventas Inc. (VTR), Nike Inc. (NKE) and IBM Corp. (IBM).
Apart from these, CBRE also disclosed the acquisition of Preuss Gesellschaft mbH and its subsidiaries, marking its second acquisition in Germany this year, after the real estate technical consulting firm – VALTEQ Gesellschaft mbH – acquired in February.
Last week, CBRE came up with second-quarter 2014 adjusted earnings of 36 cents per share, a penny ahead of the Zacks Consensus Estimate and up 16% year over year. Results were driven by solid growth in leasing, particularly in the U.S. Based on a sound performance in the first half of this year, the company has raised its adjusted earnings per share expectation by 5 cents from the initial outlook.
With market conditions continuing to improve, we believe that opportunistic acquisitions for this Zacks Rank #2 (Buy) stock would serve as growth drivers, supplementing the company’s organic growth.
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