CB Richard Ellis Group Inc. Reports Operating Results (10-Q)
Cb Richard Ellis Group Inc. has a market cap of $6.4 billion; its shares were traded at around $19.9 with a P/E ratio of 30.6 and P/S ratio of 1.5. Cb Richard Ellis Group Inc. had an annual average earning growth of 0.4% over the past 5 years.CBG is in the portfolios of Richard Blum of Blum Capital Partners, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, Murray Stahl of Horizon Asset Management, Ron Baron of Baron Funds, John Paulson of Paulson & Co., Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Manning & Napier Advisors, Inc, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: Although our management believes that strategic acquisitions can significantly decrease the cost, time and commitment of management resources necessary to attain a meaningful competitive position within targeted markets or to expand our presence within our current markets, our management also believes that most acquisitions will initially have an adverse impact on our operating and net income, both as a result of transaction-related expenditures and the charges and costs of integrating the acquired business and its financial and accounting systems into our own. For example, we incurred $200.9 million of transaction-related expenditures in connection with our acquisition of Insignia in 2003 (the Insignia Acquisition) and $196.6 million of transaction-related expenditures in connection with our acquisition of Trammell Crow Company in 2006. These transaction-related expenditures included severance costs, lease termination costs, transaction costs, deferred financing costs and merger-related costs, among others. We incurred our final transaction expenditures with respect to the Insignia Acquisition in the third quarter of 2004 and the Trammell Crow Company Acquisition in the fourth quarter of 2007. In addition, through September 30, 2010, we have incurred expenses of $41.9 million related to Insignia and $61.4 million related to Trammell Crow Company in connection with the integration of these companies business lines, as well as accounting and other systems, into our own. During the nine months ended September 30, 2010, we incurred $2.9 million of integration expenses, the majority of which were related to the acquisition of Trammell Crow Company. We expect to incur total integration expenses relating to past acquisitions of approximately $5 million during 2010, which primarily include residual integration costs associated with our acquisition of Trammell Crow Company.
Since August 2009, we have extended the maturity and amortization schedules on approximately $1.3 billion of debt. During the nine months ended September 30, 2010, we repaid $214.9 million of our senior secured term loans outstanding under our credit agreement. On October 8, 2010, CB Richard Ellis Services, Inc., or CBRE, our wholly-owned subsidiary, issued $350.0 million in aggregate principal amount of 6.625% senior notes due October 15, 2020. On October 5, 2010, we announced that we are in discussions with our lenders about the potential to refinance the approximately $1.5 billion of total debt outstanding as of September 30, 2010 under our existing credit agreement. Shortly thereafter, we repaid approximately $357.4 million of various tranches of our term A loans using net proceeds from the new $350.0 million senior notes as well as cash on hand. We intend to use approximately $500.0 million of cash on hand and up to $650.0 million of secured term loans under new senior secured credit facilities to repay the remaining outstanding debt under our existing credit agreement. Additionally, we are considering the establishment of a new $700.0 million secured revolving credit facility.
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