Family Reunion.

Cushman & Wakefield will merge with family's western offshoot

Cushman & Wakefield and Cushman Realty Corporation have reached an agreement to merge, a move that company officials said will increase its market share and solidify its position in the global marketplace.

"It's not just about being the biggest, it's about being the best," said Bruce Mosler, Cushman & Wakefield's president of U.S. operations, at a press conference last week.

Terms of the merger, which is subject to board approval including approval of Cushman & Wakefield's parent company, the Rockefeller Group, were not released because both firms are privately held. The merged company will operate under the Cushman & Wakefield name and will have 965 brokers in 174 offices world-wide. In 2000, the two firms had combined revenues in excess of $900 million and lease and sale transactions of $37 billion, according to company officials.

The merger will reunite twin brothers Louis Cushman and John Cushman III with the company their grandfather and great uncle founded in 1917. Cushman Realty Corp. was started in 1978, and currently has 200 employees -- including 90 brokers -- in 11 offices across the country. After the merger, Louis Cushman will remain in Houston and serve as vice chairman of the merged company's board and John Cushman will serve as chairman of the board and report to Arthur Mirante II, Cushman & Wakefield's president and chief executive officer.

"This is far more than a great business transaction. It is a merging of similar corporate values and cultures that we believe will enhance the combined firms' ability to service our clients' real estate needs from coast to-coast and from continent-to-continent," Mirante said.

Mosler said he anticipates few layoffs as a result of the merger. There is little redundancy between the two firms, he said, even in cities like Houston and Los Angeles where both companies conduct a significant amount of business.

"We expect it to be a smooth transactions," Mosler said.

John Cushman said Cushman Realty has been approached by "every major service firm" about the possibility of a merger but decided that merging with Cushman & Wakefield was the best fit. He said the merger will help the company provide the "skill sets and tools" needed to service clients on a global basis. He added that the company has lost business because of its inability to provide "a seamless plat form of services."

"[Cushman & Wakefield] provides the global platform and vast resources that will empower our professionals to a far greater degree in meeting the needs of clients who require increasingly sophisticated advice," John Cushman said.

Mosler said the merger is consistent with recent company moves to advance goals in key strategic areas, such as retail, industrial and multi-family. It will also give Cushman & Wakefield added strength in some geographic areas in the United States and is part of a "Pacific Rim Strategy" aimed at creating synergy, with the firm's core businesses throughout Asia.

"Merging Cushman Realty will enhance our overall strategy to grow our firm, particularly in brokerage, in key regions where we believe C&W can garner increased market share," Mosler said. "The far west, Rocky Mountain area and the southwest are three such regions."

The merger is also consistent with Cushman & Wakefield's practice of "adding experienced professionals in a strategic fashion," examples of which are the recent additions of Matlow-Kennedy and the Woolf group in California.

In fact, attracting good people was among top reasons for the merger. Cushman Realty Corp. has the highest per-broker production in the industry, Mosler said.

"It's hard to say whether this is the right way to go instead of looking to attract people on an individual basis," he said. "[Cushman & Wakefield] won't pay the multiples that some of our competitors will pay."

However, Cushman & Wakefield is not planning future mergers, saying the Cushman Realty acquisition completes the necessary piece of domestic market share, Mosler said.

"We don't anticipate more acquisitions," he said. "The way the company will grow in the future is more organically, by attracting good people."