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Spin-Off Transaction Creates Two Strong Industry Leaders: Colliers International in Commercial Real Estate and New FirstService Corporation in Residential Property Management and Services
FirstService Corporation (TSX:FSV) (Nasdaq:FSRV) today announced that its Board of Directors has approved, in principle, a plan to separate FirstService into two independent publicly-traded companies – “Colliers International,” one of the top three global leaders in commercial real estate and “FirstService Corporation,” the North American leader in residential property management and services.
After the separation, FirstService Corporation will be comprised of the current FirstService Residential and FirstService Brands divisions. Each company generates strong cash flow, has compelling growth opportunities and a long history of creating shareholder value. The spin-off transaction, which is being structured as a tax-free distribution to shareholders, will create two strong market leaders with distinct brands, customers, operating characteristics and industry dynamics:
– Colliers International has been the fastest growing commercial real estate firm in the world over the past 10 years and is ranked number 5 in the IAOP® annual list of Global Outsourcing 100 companies. It offers a full range of commercial real estate services in the United States, Canada, Europe, Australia/New Zealand, Asia and Latin America. For the year ended December 31, 2014, pro forma revenue, including contribution from acquisitions completed during the year, totalled US$1.7 billion.
– FirstService Corporation established the first North American platform in residential property management and through its portfolio of well-known and market-leading franchise brands provides a variety of property related services to residential and commercial customers. For the year ended December 31, 2014, pro forma revenue, including contribution from acquisitions completed during the year, totalled US$1.1 billion.
“With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders since becoming a publicly listed company in 1993,” said Jay Hennick, Founder and Chief Executive Officer. “For more than twenty years FirstService shareholders have enjoyed a compound annual return of more than 20% on their investment. In fact, $100,000 invested in FirstService shares when we first listed is worth more than $3.2 million today,” he added. “Over the past several years we continued to strengthen and grow our company, expanding operations internally and through acquisitions, extending our geographic reach, divesting non-core assets and undertaking a significant re-branding initiative all while maintaining a strong balance sheet and cash flows,” he continued. “Today we are taking the next bold, but logical, step in unlocking even greater value for FirstService shareholders by separating our company into two, billion dollar public companies, Colliers International and FirstService Corporation,” he concluded.
The proposed transaction will be implemented through a court-approved Plan of Arrangement and is subject to final approval from FirstService’s Board of Directors. FirstService expects that the Arrangement, when completed, will result in the establishment of a new public company that will be named FirstService Corporation and the current publicly traded company called FirstService will change its name to Colliers International Group, Inc.. The Arrangement is expected to be tax free to shareholders. The intention is for both the subordinate voting shares of Colliers International and FirstService Corporation to be listed on the Toronto Stock Exchange and the NASDAQ Stock Market, consistent with the current dual listing of FirstService’s subordinated voting shares. The Arrangement will also be subject to regulatory, court and shareholder approvals.
Creating two separate and independent publicly traded companies will enable each company and its shareholders to:
– Intensify its focus on core businesses and customers
– Pursue independent value creation strategies
– Implement distinct capital allocation strategies
– Attract appropriate investors and offer better comparability with publicly traded peers
– Create two different and compelling investment opportunities
