NEWPORT BEACH — CB Commercial Real Estate Services Group said Tuesday that it will sign a definitive agreement this week to acquire Newport Beach-based Koll Real Estate Services for $165.9 million.
The acquisition, which was announced in March, will unite the nation's largest real estate brokerage with one of the largest property managers in the country.
For the Record
Los Angeles Times Tuesday May 20, 1997 Orange County Edition Business Part D Page 12 Financial Desk 2 inches; 39 words Type of Material: Correction
CB Commercial--A May 14 story on an agreement by CB Commercial Real Estate Services Group to acquire Koll Real Estate Services should have said that CB expects to record a one-time charge of $15 million to $18 million related to the deal. The company made no earnings projections.
Chairman Donald Koll will remain a director of the combined company, which will be called CB Commercial. However, he will not hold an operating position. Instead, he will consult on "forward planning and strategic development" and oversee the operations of the other real estate entities that bear his name, including Koll Construction, Koll Resorts International and Koll Real Estate Group, said Ray Wirta, Koll chief executive.
All of the members of the Koll executive team, including Wirta and President William Rothe, will retain senior positions with CB Commercial. However, company officials say they have not determined how many of Koll's administrative staffers will be laid off when the two companies combine their operations in Los Angeles.
Koll, which manages nearly 200 million square feet of real estate, has 2,400 employees in the United States and Asia. It posted revenue of $115 million last year.
CB Commercial Chairman James J. Didion said the Koll acquisition will allow CB to eliminate about $12 million in overhead. It will also boost the firm's 1997 earnings to $18 million from $15 million.
Under the terms of the deal, CB will offer about 5.6 million shares of its common stock for Koll and assume $35 million of the firm's debt. It will also provide warrants for an additional 600,000 CB shares at $30 a share. It is currently trading around $23.50.
The deal has been approved by the boards of both companies. It is expected to close in mid-August pending shareholder approval and antitrust clearance.