CBRE Services Inc. announced its plans to acquire Global Workplace Solutions (GWS), an operating unit of Johnson Controls Inc., and finance the $1.475 billion purchase price with debt and cash. Although leverage will rise as a result of the acquisition, we still expect the company?s debt-to-EBITDA to be between 2x-3x. The acquisition will also add to CBRE?s growing facility management services segment--enhancing recurring revenues, improving the company?s geographic and end-user diversification, and providing additional cross-sale opportunities. We are affirming our issuer credit rating on CBRE Services Inc. at 'BBB-'. The positive outlook reflects our view that the company will integrate GWS without any major operational difficulties and reduce leverage toward 2x in the quarters following the close of the acquisition.
