BGC To Buy Berkeley Point For $875 Mln; Sees Deal To Dramatically Lift Results

(RTTNews) - BGC Partners Inc. (BGCP), a brokerage company, announced Tuesday that it has agreed to acquire Berkeley Point Financial LLC., a commercial real estate finance company. The total consideration payable by BGC for Berkeley Point is $875 million, subject to certain adjustments at closing.

The acquisition is expected to be immediately accretive to BGC's earnings per share upon closing.

BGC will also invest $100 million in cash for approximately 27 percent of the capital in a commercial real estate-related finance and investment business, along with Cantor. Cantor will control the Investment and will contribute approximately $267 million of cash and non-cash assets for approximately 73 percent of the Investment's capital.

The Board of Directors of BGC has unanimously approved the acquisition of Berkeley Point and the related transactions. After the deal closure, Berkeley Point and the investment in the new real estate business will become part of Newmark Knight Frank, BGC's Real Estate Services segment.

Berkeley Point was acquired by an affiliate of Cantor Fitzgerald, L.P.2 on April 10, 2014.

Howard Lutnick, Chairman and Chief Executive Officer of BGC, said, "We believe that the addition of Berkeley Point will significantly increase the scale and scope of Newmark, as well as substantially improve upon its already strong financial performance."

Berkeley Point generated revenues and pre-tax income of $314 million and $143 million, respectively, for the trailing 12 months ended March 31, representing increases of 55 percent and 169 percent, respectively.

For the year 2017, Berkeley Point's revenues are expected to increase by at least 30 percent compared with $294 million in 2016, and at least an additional 20 percent year-over-year in 2018.

Berkeley Point's 2017 pre-tax income is expected to increase by at least 35 percent, and by at least 35 percent year-over-year again in 2018.