Property outsourcing company Trillium is being acquired just three years after its formation, by the UK’s largest property company, Land Securities plc. Land Securities will acquire the equity of Trillium for 160 million in cash and 680,000 shares, subject to due diligence, as well as Trillium’s net debt of approximately 165 million, bringing the total cost of the deal to 330 million. Trillium, owned by its management and the Whitehall Street Funds (a vehicle for property investment by the directors of Goldman Sachs), was created to bid for the DSS PRIME property outsourcing contract, which it won. For the past nine months, the company has been working with Land Securities in joint venture bids for the BBC and London Underground Property Partnership (LUPP) Private Finance Initiatives (PFI) contracts. They have reached the last two shortlisted bidders for both contracts; decisions should be made for both in the next few months.
Analysts agree that acquiring the company that pioneered the services model for property is an imaginative move for Land Securities, but disagree as to whether it indicates a real change of direction for the company. Some ask if the need for a quick return on investments has cut short the development of a genuinely far-sighted and service-oriented company. Still others wonder if the move marks the realization that the industry must change.
Based on a report from i-FM
