- CBRE has agreed to acquire J&J Worldwide Services from Arlington Capital Partners for up to $1.05 billion.
- CBRE said it is committing to an initial cash payment of $800 million, with a potential for up to $250 million more, payable in 2027, if J&J meets certain performance thresholds, it said in a Monday news release.
- The deal aligns with CBRE’s strategy, which involves boosting revenue resilience, enhancing technical services and expanding its government client base within its global workplace solutions arm, the real estate services firm’s chair and CEO, Bob Sulentic, said in the release. “We are adding a company with deep government contracting experience, long-term customer relationships and a 50-year record of outstanding technical service delivery,” Sulentic said.
J&J, based in Franklin, Tennessee, supports civilian and defense agencies in the federal government across three business lines: healthcare and medical solutions, mission support solutions and engineering solutions. It primarily serves the U.S. Department of Defense through fixed-price, long-term contracts for cleaning and maintenance services for military hospitals and clinics and facility management, operational support and integrated asset management for military bases. The company, which has more than 3,300 employees worldwide, operates at over 250 hospitals, clinics and military installations across the U.S., Europe, Asia, the Caribbean and the Middle East, per the release.
This year, J&J is projected to generate more than $525 million in revenue and roughly $65 million in earnings before interest, taxes, depreciation and amortization, CBRE said in its release. Joining CBRE will help J&J further develop and broaden its services to military clients and facilities worldwide, J&J CEO Steve Kelley said in the release.
Arlington Capital Partners, a Washington, D.C.-based private equity firm that specializes in government-regulated industries, acquired J&J Worldwide in 2020. “During our partnership, J&J has achieved significant organic growth by winning large, transformational and critical contracts at facilities where failure is simply not an option for the United States,” Michael Lustbader, a managing partner at Arlington Capital Partners, said in a separate Monday news release.
“We are excited to see how J&J and CBRE will continue to benefit from the secular tailwinds we identified during our initial investment,” Gordon Auduong, a principal at Arlington Capital Partners said in a statement, saying that J&J, under CBRE’s stewardship, is “well-positioned to continue building on its success.”
Subject to the deal receiving applicable regulatory clearances and meeting other closing conditions, CBRE said it expects the acquisition to close “in the coming months.”