CBRE agrees to buy Onnec for $610 million in cash plus earnout

CBRE Group Inc. (CBRE) said Tuesday in a regulatory filing that it has signed a definitive agreement to acquire Onnec Group Limited, a provider of data center infrastructure services, for £460 million, or about $610 million, in cash.

The deal also includes a multi-year earnout of up to £300 million, or about $400 million, that depends on Onnec meeting certain growth thresholds.

Onnec will operate as part of CBRE's Critical Infrastructure Services business line. The company is based in London and was founded in 1986.

CBRE expects that business line to generate nearly $4.5 billion of total revenue in 2027, including contributions from Onnec.

The rest of the company's services businesses, most notably Project Management and Advisory Services, are expected to generate almost $2.5 billion of infrastructure services revenue in 2027. Together, that would total nearly $7.0 billion, excluding revenue from periodic data center land sales in the development business.

Onnec is expected to generate approximately £370 million, or $498 million, in revenue in 2027. It is also expected to produce more than £50 million, or $67 million, of core EBITDA that year.

Core EBITDA is a non-GAAP measure of earnings before interest, taxes, depreciation, amortization and asset impairments, among other items.

The company said the acquisition will be immediately accretive to its core earnings per share, meaning it adds to that measure from the start.

Onnec designs, deploys and maintains network, fiber and data center infrastructure. Its roughly 800 employees serve hyperscalers, the large cloud and technology companies, in the United Kingdom, Continental Europe and Asia Pacific.

The company said Onnec's geographic presence aligns well with the data center infrastructure services that CBRE delivers in the United States.

“CBRE is pursuing an explicit strategy to build a global infrastructure services business to complement our real estate services business,” said Vikram Kohli, Chief Operating Officer of CBRE. “We’ve long believed Onnec is an excellent fit in this strategy.”

“The acquisition is also consistent with our ongoing effort to build resilient businesses that benefit from secular tailwinds,” Kohli said.

Onnec Chairman Barry Horgan said, “From day one, our focus has been on delivering exceptional connectivity solutions for our customers. As part of CBRE, we gain the platform and expertise to broaden our capabilities, creating even greater value for our clients.”

The transaction is subject to customary regulatory approvals and is expected to be completed around the end of the year. The filing does not say how the cash will be funded.

J.P. Morgan Securities LLC is acting as financial advisor and Simpson, Thacher & Bartlett LLP as legal advisor to CBRE. Goldman Sachs International is acting as financial advisor and Freshfields LLP as legal advisor to Onnec.