NEW YORK (April 28, 2011) – BGC Partners, Inc. (NASDAQ:BGCP), (“BGC Partners” or “BGC”), one of the world’s leading voice and electronic brokers serving the global wholesale financial markets, today announced that it has entered into an agreement to acquire Newmark, the real estate advisory firm which operates as Newmark Knight Frank in the U.S. and which is associated with London-based Knight Frank, which has extensive offices throughout the rest of the world. The transaction, which encompasses approximately 425 Newmark brokers and includes Newmark’s New York business as well as a majority interest in over 25 other domestic offices and certain of its affiliates, will be immediately accretive to BGC.
Howard W. Lutnick, Chairman and CEO of BGC, said “This is the beginning of a dramatic new footprint in commercial real estate by BGC, and the definitive starting point of BGC’s strategy to grow in this sector. In financial services brokerage over the last five years, we have added more than 1,000 brokers, grown revenues to over $1.3 billion, massively invested in our world-class proprietary technology, and increased our distributable earnings margin hundreds of basis points. We will use the same strategies to position Newmark for dramatic growth. We expect our model will prove to be just as profitable for Newmark’s business as we build scale, and generate the same kind of outstanding margins as in our financial brokerage business.”
Newmark is one of the fastest growing real estate services companies in the global property markets. Its brand is recognized for providing seamless, sophisticated, comprehensive real estate solutions to prominent corporate and institutional clients across the globe.
Mr. Lutnick stated “Hiring and acquiring key experienced brokers, continuously investing in our proprietary technology, and expanding into new markets are the drivers for BGC’s growth, and we will apply those drivers to create new capabilities and opportunities in commercial real estate brokerage. By applying our world-class technology platform and management skills, we will provide superior support to Newmark’s brokers, further building Newmark’s business as we’ve done consistently with BGC.”
Mr. Lutnick added “BGC’s partnership, dividend, and compensation models, along with our hiring and retention incentives, have been key factors in our growth and success, and will also substantially contribute to generating growth in our real estate brokerage business. Both BGC and Newmark count the world’s leading banks and investment banks as clients, and we see exciting opportunities for cross-marketing, given the outstanding suite of transactional and consultative services Newmark offers the corporate and institutional market.”
Newmark’s management, led by CEO Barry M. Gosin, are expected to become partners in BGC upon the closing of the acquisition. Mr. Gosin will continue to oversee Newmark’s day-to-day business as CEO, and will report to Mr. Lutnick.
Mr. Gosin said “As a board member of BGC’s predecessor, eSpeed, Inc., I had come to know and admire BGC’s management team and business model. The synergy in the structure of our brokerage businesses, along with improving fundamentals and deal velocity in the commercial real estate marketplace, are excellent signals of Newmark’s growth prospects as part of BGC. In addition, we expect that BGC’s deep and long-standing relationships with the world’s leading financial institutions can only enhance Newmark’s reach in the marketplace.”
James D. Kuhn, President of Newmark, added “This is a terrific development for Newmark’s brokers and our clients. Our business will capitalize on BGC’s cutting-edge platform and continuing investment in technology, and our brokers will be able to increase their productivity and continue to expand the range of services they offer our clients.”
Cantor Fitzgerald & Co., an affiliate of Cantor Fitzgerald, L.P., acted as an adviser in connection with this transaction. Miller Buckfire advised Newmark on this transaction.