by Brianna Crandall — August 19, 2013—Multinational outsourced services company UGL Limited has announced plans to pursue a demerger to create two standalone companies, one focused on global property services (DTZ) and the other on engineering, construction and maintenance services in Australia, New Zealand and Asia (Engineering).
The decision to spin off the companies follows the completion of a corporate structure review announced by UGL in March. It concluded that a structural separation of DTZ and UGL’s Engineering division via demerger provides the optimal corporate structure for both businesses. A demerger recognizes that the two businesses operate in fundamentally different markets and have different geographic focuses and strategic requirements going forward, explains UGL. The Board expects that a demerger will deliver the best long-term sustainable outcome for all UGL stakeholders, enhancing shareholder value over the short and long term and proving beneficial to clients and employees.
The global integration of DTZ and the build-out of DTZ’s new global headquarters in the United States will be completed prior to the demerger, the company said.
UGL will proceed as quickly as possible to prepare DTZ and Engineering to operate on a standalone basis. This will require independent corporate and financial structures to be established across both businesses, including separate Boards of Directors and management teams, and separate capital structures and dividend policies, notes the company. UGL aims to complete the demerger in FY2015, subject to regulatory and statutory approvals, including shareholder approval.
“While we will proceed as quickly as possible to prepare the businesses for a demerger, during the preparation phase, we will remain focused on executing the respective growth strategies for each business. It is business as usual for both DTZ and Engineering, and we will work to ensure no disruption to clients, employees, suppliers or other stakeholders,” said UGL managing director and CEO Richard Leupen.
With beginnings in 1784, DTZ is a global integrated property services company serving many of the world’s greatest companies, with 45,000 people operating from over 200 offices in 52 countries around the world. DTZ provides end-to-end property solutions to occupiers, developers, property owners and investors, and has a strong recurring revenue base generated by its expertise in integrated facilities management services.
Engineering is a market leader in engineering, construction and maintenance services in Australia, New Zealand and Asia. Engineering has a diversified end-market exposure across rail, resources and infrastructure projects balanced by a leading operations and maintenance capability delivering a material recurring revenue base. The Engineering business employs 8,000 people.
