Arlington Capital Partners – a Washington, D.C.-area private investment firm specializing in government-regulated industries – announced it has agreed to sell J&J Worldwide Services to CBRE Group. J&J is a leading provider of essential and preventative maintenance activities to the U.S. Federal Government with over 250 hospitals, clinics, and military installations and 3,300 employees globally.
The purchase price will be up to $1.05 billion, including $800 million of upfront cash and up to $250 million of contingent consideration, subject to meeting certain performance thresholds.
Launched in 1970 and based in Franklin, Tennessee, J&J has a comprehensive portfolio of facility support offerings for the federal government and healthcare facilities, including aseptic cleaning, maintenance, and engineering services, and a diverse range of facility management, operational support, and integrated asset management services for US Department of Defense military hospitals and bases.
The closing of the acquisition is subject to obtaining applicable regulatory clearances and other customary closing conditions. And closing is expected in the coming months.
J.P. Morgan Securities LLC serves as financial advisor to J&J and Sheppard Mullin Richter & Hampton LLP serves as legal advisor to J&J and Arlington Capital Partners. And Citi is serving as financial advisor to CBRE and Simpson Thacher & Bartlett LLP, and ArentFox Schiff LLP is serving as legal advisors.
KEY QUOTES:
“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. We are proud to have extended J&J’s 50-year history of continuous organic growth under our ownership. CBRE’s leadership in real estate services and global footprint position them to be an excellent home for J&J to build upon its achievements. J&J represents a prime example of Arlington’s ability to invest in founder-owned businesses and accelerate their growth through our industry expertise and network of world-class executives.”
– Michael Lustbader, a Managing Partner at Arlington
“It was vital for us to continue the legacy and culture that the Voudouris family worked tirelessly to build. Our partnership with Arlington allowed us to stay true to these core values while accelerating organic growth in all parts of our business. Over the last four years and with excellent guidance from Arlington, we have been able to make great strides in further realizing our full potential through increasing our global reach and footprint as well as bringing our unique capabilities to a broader set of customers. The management team and I are excited for our future with CBRE and the opportunities ahead for our combined organizations.”
“Becoming part of CBRE provides J&J a great opportunity to continue building upon and expanding the solutions we provide our military customers at mission-critical facilities around the world. Arlington Capital Partners provided the industry expertise and guidance needed to scale our solutions at an unrivaled pace and prepare us for continued growth. We are excited about combining our capabilities and track record with CBRE’s to enhance our commitment to serving those that serve our nation.”
– Steve Kelley, CEO of J&J
“J&J continues to prove itself as a highly durable industry leader, and its unparalleled commitment to its customers’ success has led to superior performance in support of U.S. Federal Government infrastructure. We are excited to see how J&J and CBRE will continue to benefit from the secular tailwinds we identified during our initial investment and believe under CBRE’s stewardship that J&J is well-positioned to continue building on its success.”
– Gordon Auduong, a Principal at Arlington Capital Partners
“The acquisition is consistent with key elements of our M&A strategy that focus on enhancing our technical services capabilities, increasing revenue resilience and secular growth and expanding our government client base within Global Workplace Solutions. We are adding a company with deep government contracting experience, long-term customer relationships and a 50-year record of outstanding technical service delivery.”
– Bob Sulentic, chair & chief executive officer of CBRE
