Johnson Controls announced it has completed the sale of its Global Workplace Solutions (GWS) business to CBRE Group for $1.475 billion. Global Workplace Solutions is one of the world's largest providers of facilities management services.
The sale includes a 10-year strategic relationship between the two companies. Johnson Controls will be the preferred provider of HVAC equipment, building automation systems and related services to the 5 billion sq. ft. portfolio of real estate and corporate facilities managed globally by CBRE and GWS. The agreement provides Johnson Controls with new channels for its offerings and when fully operational is expected to generate up to $500 million of annual incremental revenue for the Johnson Controls Building Efficiency business.
"The sale of Global Workplace Solutions goes
Additionally, the companies will jointly provide $40 million over 10 years to fund a building innovation lab that will develop leading-edge energy management solutions to lower costs and enhance their clients' work environments. The joint innovation lab will evaluate, connect and leverage products, services and energy data to create value for occupiers and investors of real estate.
CBRE will also provide Johnson Controls with a full suite of integrated corporate real estate services (including facilities management, project management and transaction services) on more than 50 million sq. ft. of Johnson Controls properties.
The decision to sell its GWS business is part of Johnson Controls' strategy to invest in product businesses that are core to its multi-industrial portfolio and growth objectives.
BofA Merrill Lynch acted as the financial advisor to Johnson Controls, with Wachtell, Lipton, Rosen & Katz serving as legal advisor.