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CBRE GROUP, INC. 8-K Report (Aug 7, 2003)

Reports
Other Events
Filing Date
Filed August 7, 2003
Period End
July 23, 2003
Security
CBRE
In the record · 2016–202610-K1110-Q328-K149

CBRE filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 149 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Leadership change8-K · Apr ’19Apr ’19
  3. Material agreement8-K · Jul ’21Jul ’21
  4. Leadership change8-K · Aug ’25Aug ’25

01—Abstract

Summary

Summary of the 8-K filed August 7, 2003. Cited figures are marked; the original filing is the authoritative source.

CBRE Holding, Inc., the parent of CB Richard Ellis Services, reported on Form 8-K that it completed its acquisition of Insignia Financial Group, Inc. on July 23, 2003, under an Amended and Restated Merger Agreement dated May 28, 2003.

Insignia common stockholders received $11.156a per share in cash, preferred holders received $100.00 per share plus accrued dividends, and Insignia's NYSE listing was terminated with the company deregistering under the Exchange Act. Insignia became a wholly owned subsidiary of CB Richard Ellis Services. The transaction was financed through roughly $105.4 million from Blum Strategic Partners for Class B common stock, a $200 million 9¾% Senior Notes release due 2010, $75 million of term loan borrowings, and about $36.9 million of cash proceeds from the simultaneous sale of Insignia's real estate investment assets to Island Fund I LLC, an entity affiliated with Insignia's former CEO Andrew Farkas.

For investors, the filing is primarily a transaction-completion notice. It does not include the target's financial statements or pro forma information, which CBRE committed to file by amendment no later than October 6, 2003, so the filing alone gives limited insight into the combined company's financial impact. CBRE described itself as having approximately 9,500 employees, roughly 250 offices across 47 countries, and 2002 net revenues of $1.17 billionb.

The filing also reflects a significant recapitalization and added leverage through the new senior notes and term loan, which investors would need to weigh against the expected benefits of combining the two real estate services firms. The Island Fund sale of Insignia's real estate investment assets, executed immediately before the merger, is a notable related-party element because the buyer is affiliated with Insignia's former leadership. Investors reviewing the transaction would want to examine the pricing and terms of that carve-out, along with the post-closing capital structure and the pro forma financials when they are filed.

02—Key points

Key Highlights

  1. Completed acquisition of Insignia Financial Group on July 23, 2003, with Insignia becoming a wholly owned subsidiary of CB Richard Ellis Services, Inc.
  2. Insignia common stockholders received $11.156 per share in cash; preferred Series A and B holders received $100.00 per share plus accrued dividends.
  3. Insignia's real estate investment assets were sold to Island Fund I LLC, an entity affiliated with Insignia's former Chairman and CEO Andrew Farkas, for approximately $36.9 million in cash proceeds.
  4. Financing included about $105.4 million from Blum Strategic Partners for Class B common stock, $200 million of 9¾% Senior Notes due 2010, and $75 million of term loan borrowings.
  5. Insignia's common stock was delisted from the NYSE and deregistered under the Securities Exchange Act of 1934 following the merger.
  6. CBRE reported approximately 9,500 employees, about 250 offices in 47 countries, and 2002 net revenues of $1.17 billion.
  7. Required financial statements of the acquired business and pro forma financial information were not included and are to be filed by amendment no later than October 6, 2003.

03—Questions

Frequently Asked Questions

  1. What did Insignia shareholders receive in the transaction?

    Holders of Insignia common stock received $11.156 per share in cash, without interest. Series A and Series B preferred stockholders received $100.00 per share plus accrued and unpaid dividends. Outstanding options and warrants were cashed out at the spread over their exercise price.

  2. How was the acquisition funded?

    Funding came from the sale of Class B common stock to Blum Strategic Partners (about $105.4 million), Class A common stock to DLJ Investment Partners and CalPERS (about $13.6 million combined), a Class B sale to Frederic Malek ($0.96 million), release of $200 million of 9¾% Senior Notes due 2010 from escrow, $75 million of term loan borrowings, and about $36.9 million from the Island Fund asset sale.

  3. Why is the Island Fund asset sale significant?

    Island Fund I LLC is affiliated with Andrew L. Farkas and certain other former Insignia officers, so the sale of Insignia's real estate investment assets was a related-party transaction completed immediately before the merger. Investors may want to review the terms and valuation of that carve-out.

  4. Has Insignia's stock continued to trade?

    No. Following the merger, Insignia's common stock ceased trading on the New York Stock Exchange, was delisted, and was deregistered under the Securities Exchange Act of 1934.

  5. When will the detailed financial information for the acquisition be available?

    CBRE stated that the financial statements of the acquired business (Item 7(a)) and pro forma financial information (Item 7(b)) were not included in this filing and would be provided in an amendment to this Form 8-K no later than October 6, 2003.

04—Continue

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