What did public shareholders receive for their CB Richard Ellis Services shares?

Each outstanding share of Services common stock, other than shares held by the buying group, treasury shares, and shares of holders who perfected appraisal rights, was converted into the right to receive $16.00 in cash at the effective time of the merger on July 20, 2001.

Who controls CB Richard Ellis after the going-private transaction?

The company remains controlled by RCBA Strategic Partners and its affiliates, which are associated with Blum Capital Partners. Under the Securityholders' Agreement they have the right to designate a majority of the Company's directors. Other continuing stockholders include FS Equity Partners, The Koll Holding Company, CalPERS, and senior executives Raymond Wirta and Brett White.

How was the merger financed and how much debt does the company now carry?

Funding came from equity contributions (including Class B shares issued to continuing stockholders, about $25.5 million from Strategic and $45.4 million from Blum), employee and CalPERS share purchases, $65 million of 16% Senior Notes sold as units with Class A shares, $229 million of 11 1/4% Senior Subordinated Notes due 2011, and roughly $285 million of new credit facility borrowings. Long-term debt was already $409.7 million at March 31, 2001 before the merger closed, so the post-closing leverage is expected to be considerably higher.

What happened to the company's existing 8 7/8% Senior Subordinated Notes?

The tender offer for the 8 7/8% Senior Subordinated Notes due 2006 was completed on July 20, 2001, with 100% of the outstanding principal validly tendered and purchased on the payment date.

Is the company still publicly traded, and when will pro forma financials be available?

The common stock was delisted from the NYSE, so public trading in the company's shares has ended. The pro forma financial information required by Item 7(b) was not included in this filing and the company intends to file it as an amendment to this Form 8-K no later than October 2, 2001.

CBRE 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed August 3, 2001. Cited figures are marked; the original filing is the authoritative source.

CBRE Holding, Inc. filed this Form 8-K to report the completion, on July 20, 2001, of the going-private merger of CB Richard Ellis Services, Inc. (NYSE: CBG) with BLUM CB Corp., a subsidiary of CBRE Holding controlled by Blum Capital Partners.

Each outstanding public share of Services was converted into the right to receive $16.00^a in cash, the transaction is valued at roughly $800 million, and the Services stock was delisted from the NYSE. Following the merger, the company remains controlled by RCBA Strategic Partners (Blum affiliates), which have the right to designate a majority of the board. The filing also includes Services' audited 2000 and 1999 financial statements and unaudited Q1 2001 results, which show Q1 2001 net loss of $2.8 million on $272.5 million of revenue, versus net income of $20 thousand a year earlier.

The merger was financed through a mix of equity contributions, employee and CalPERS share purchases, $65 million^b of 16% Senior Notes with warrants-style units, $229 million of 11 1/4% Senior Subordinated Notes issued by the acquisition vehicle, and approximately $285 million of new borrowings under a credit agreement led by Credit Suisse First Boston. The existing 8 7/8% Senior Subordinated Notes were tendered at 100%. Post-closing, the capital structure is significantly more leveraged, with total long-term debt rising from about $304 million at December 31, 2000 to about $410 million at March 31, 2001 before the transaction, and the debt-to-equity ratio reported in the quarterly data reaching over 2x in early 2001.

For investors, the key takeaways are that public shareholders have been cashed out at $16.00^c per share and no longer hold a stake in the company, while the new structure creates a privately controlled, highly levered real estate services firm. The pro forma financial information required under Item 7(b) was not included and is to be filed by amendment no later than October 2, 2001. Operating performance in Q1 2001 weakened from prior year, with Transaction Management posting an operating loss, and the company faces a pending settlement of certain class actions tied to the going-private transaction.

02—Key points

Key Highlights

Completed going-private merger on July 20, 2001: public shareholders of CB Richard Ellis Services received $16.00 in cash per share, valuing the transaction at approximately $800 million.
Services common stock was delisted from the New York Stock Exchange; the company now operates as a privately controlled subsidiary of CBRE Holding, Inc.
Control remains with RCBA Strategic Partners and affiliates (Blum Capital), which have the right to designate a majority of the board under the Securityholders' Agreement.
Financing combined equity contributions, employee and CalPERS share purchases, $65 million of 16% Senior Notes units, $229 million of 11 1/4% Senior Subordinated Notes due 2011, and about $285 million of new bank borrowings led by Credit Suisse First Boston.
Q1 2001 revenue was $272.5 million (up 4% year over year), but the company swung to a net loss of $2.8 million from net income of $20 thousand, driven by a $4.1 million operating loss in Transaction Management.
Leverage rose sharply: long-term debt reached $409.7 million at March 31, 2001 and the company refinanced substantially all of its existing indebtedness as part of the transaction.
Pro forma financial information under Item 7(b) was not included and will be filed in an amendment to this 8-K by October 2, 2001.

03—Questions

Frequently Asked Questions

What did public shareholders receive for their CB Richard Ellis Services shares?
Each outstanding share of Services common stock, other than shares held by the buying group, treasury shares, and shares of holders who perfected appraisal rights, was converted into the right to receive $16.00 in cash at the effective time of the merger on July 20, 2001.
Who controls CB Richard Ellis after the going-private transaction?
The company remains controlled by RCBA Strategic Partners and its affiliates, which are associated with Blum Capital Partners. Under the Securityholders' Agreement they have the right to designate a majority of the Company's directors. Other continuing stockholders include FS Equity Partners, The Koll Holding Company, CalPERS, and senior executives Raymond Wirta and Brett White.
How was the merger financed and how much debt does the company now carry?
Funding came from equity contributions (including Class B shares issued to continuing stockholders, about $25.5 million from Strategic and $45.4 million from Blum), employee and CalPERS share purchases, $65 million of 16% Senior Notes sold as units with Class A shares, $229 million of 11 1/4% Senior Subordinated Notes due 2011, and roughly $285 million of new credit facility borrowings. Long-term debt was already $409.7 million at March 31, 2001 before the merger closed, so the post-closing leverage is expected to be considerably higher.
What happened to the company's existing 8 7/8% Senior Subordinated Notes?
The tender offer for the 8 7/8% Senior Subordinated Notes due 2006 was completed on July 20, 2001, with 100% of the outstanding principal validly tendered and purchased on the payment date.
Is the company still publicly traded, and when will pro forma financials be available?
The common stock was delisted from the NYSE, so public trading in the company's shares has ended. The pro forma financial information required by Item 7(b) was not included in this filing and the company intends to file it as an amendment to this Form 8-K no later than October 2, 2001.

04—Continue

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