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JLL Closes Acquisition of HFF, Boosts Capital Market Business

Zacks Equity Research

Jones Lang LaSalle Incorporated JLL — popularly known as JLL — has completed its acquisition of HFF Inc. This cash-and-stock transaction, valued at about $1.8 billion and first announced in March 2019, comes as part of JLL’s effort to substantially boost its Capital Markets business.

Notably, HFF offered clients a fully-integrated capital market platform, including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and commercial loan servicing. The company has closed more than $800 billion in excess of 27,000 transactions since 1998 and generated revenues of more than $650 million in 2018.

Therefore, following the acquisition, with a global team of more than 3,700 capital market professionals across 47 countries, JLL now has a superior ability to offer capital market services and expertise to its clients. Also, the combined entity is projected to deliver significant run-rate synergies, estimated at around $60 million, over two to three years.

Former CEO of HFF — Mark Gibson — has joined JLL as CEO, Capital Markets, Americas, as well as the co-chair of its Global Capital Markets Board.

JLL financed the cash part of the purchase price consideration with a mixture of cash reserves and its existing syndicated credit facility.

Admittedly, JLL has a diversified product & services range which helps register balanced revenue growth across its operating markets. Also, spate of strategic investment activities, in a bid to capitalize on market consolidations, will likely boost its long-term profitability. In fact, market-share expansion will help JLL achieve stellar growth and a decent cash level, aiding consistent and timely deleveraging.

JLL currently carries a Zacks Rank #3 (Hold). So far this year, shares of the company have gained 11.2%, underperforming the industry’s 24.8% increase.

Stocks to Consider

Investors interested in the real estate industry can consider some better-ranked stocks like FirstService Corporation FSV, CBRE Group Inc. CBRE and Cushman & Wakefield CWK. While FirstService Corporation currently flaunts a Zacks Rank of 1 (Strong Buy), CBRE Group and Cushman & Wakefield has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FirstService Corporation’s 2019 EPS moved up nearly 5% to $2.96, over the last 30 days.

CBRE Group has seen the Zacks Consensus Estimate for the current-year EPS being revised 0.8% upward over the past two months to $3.61.

Cushman & Wakefield’s Zacks Consensus Estimate for the ongoing year’s EPS have been revised marginally north to $1.66, in seven days’ time.

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