On February 27, 2024, we acquired a 100% ownership interest in J&J Worldwide Services (J&J), a leading provider of engineering services, base support operations and facilities maintenance for the U.S. federal government. J&J primarily serves the U.S. Department of Defense through long-term, fixed-price contracts and is reported as part of our Global Workplace Solutions (GWS) segment. The acquisition is consistent with key elements of our M&A strategy that focus on enhancing our technical services capabilities, increasing revenue resilience and secular growth, and expanding our government client base within our GWS segment.

The J&J acquisition was treated as a business combination under Topic 805 and was accounted for using the acquisition method of accounting. We financed the acquisition with (i) the issuance in February 2024 of $500 million in aggregate principal amount of 5.500% senior notes due April 1, 2029; (ii) borrowings under our existing revolving credit facility under our 2023 Credit Agreement; and (iii) cash on hand. See Note 11 – Long-Term Debt and Short-Term Borrowings for more information on the above-mentioned debt instruments.

The purchase price included $7 million of contingent consideration, representing the acquisition date fair value recognized for up to $250 million gross of potential future earnout payments based on the achievement of certain performance thresholds during calendar years 2025 and 2026.


Purchase price	$	819
Less: Estimated fair value of net assets acquired (see table below)	353
Excess purchase price over estimated fair value of net assets acquired	$	466

The purchase accounting adjustments related to the J&J acquisition have been recorded in the accompanying consolidated financial statements. The excess purchase price over the fair value of net assets acquired and non-controlling interest has been recorded to goodwill. The goodwill arising from the J&J acquisition consists largely of the synergies and opportunities to deliver premier engineering services, base support operations and facilities maintenance services. Of the goodwill generated, approximately $115 million is deductible for tax purposes.

The acquired assets and assumed liabilities of J&J were recorded at their estimated fair values. The purchase price allocation for the business combination is primarily for intangibles and subject to change within the respective measurement period which will not extend beyond one year from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined. Any such adjustments may be material.

The following table summarizes the fair values assigned to the identified assets acquired and liabilities assumed at the acquisition date on February 27, 2024 (dollars in millions):


Assets Acquired:
Cash and cash equivalents	$	26

Receivables, net	91
Contract assets	19
Prepaid expenses	2
Other current assets	2
Property and equipment, net	11
Other intangible assets, net	297
Operating lease assets	6
Investments in unconsolidated subsidiaries	20
Other assets, net	10
Total assets acquired	484
Liabilities Assumed:
Accounts payable and accrued expenses	56
Compensation and employee benefits payable	10
Contract liabilities	1
Income taxes payable	1
Other current liabilities	3
Non-current operating lease liabilities	3
Deferred tax liabilities, net	48
Other liabilities	3
Total liabilities assumed	125
Non-controlling Interest Acquired	6
Estimated Fair Value of Net Assets Acquired	$	353


				As of December 31, 2024
Asset Class	Amortization Period	Amount Assigned at Acquisition Date		Accumulated Amortization		Net Carrying Value
Customer relationships	9-12 years	$	174	$	12	$	162
Backlog	4-6 years	111		21		90
Trademark	3 years	10		3		7
Technology	5 years	2		—		2

The fair value of customer relationships and backlog was determined using the Multi-Period Excess Earnings Method (MPEEM), a form of the Income Approach. The MPEEM is a specific application of the Discounted Cash Flow Method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental cash flows attributable only to the subject intangible asset. This estimation used certain unobservable key inputs such as timing of projected cash flows, growth rates, expected contract renewal probabilities, discount rates, and the assessment of useful life.

The fair value of the trademark and the existing technology was determined by using the Relief-from-Royalty Method, a form of the Income Approach, and relied on key unobservable inputs such as timing of the projected cash flows, growth rates, and royalty rates. The basic tenet of the Relief-from-Royalty Method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments.

Unaudited pro forma results, assuming the J&J acquisition had occurred as of January 1, 2023 for purposes of the pro forma disclosures for the years ended December 31, 2024 and 2023 are presented below. They include certain adjustments for increased amortization expense related to the intangible assets acquired (approximately $3 million and $19 million in 2024 and 2023, respectively) as well as increased interest expense related to the long-term financing (approximately $4 million and $28 million in 2024 and 2023, respectively). Direct transaction and integration costs of $25 million as well as the tax impact of all pro forma adjustments are also included in the unaudited pro forma results.

These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what operating results would have been had the J&J acquisition occurred on January 1, 2023 and may not be indicative of future operating results (dollars in millions, except share and per share data):


	Year Ended December 31,
	2024		2023
Revenue	$	35,839	$	32,411
Operating income	1,431		1,079
Net income attributable to CBRE Group, Inc.	979		933
Basic income per share:
Net income per share attributable to CBRE Group, Inc.	$	3.20	$	3.03
Weighted average shares outstanding for basic income per share	305,859,458		308,430,080
Diluted income per share:
Net income per share attributable to CBRE Group, Inc.	$	3.18	$	2.99
Weighted average shares outstanding for diluted income per share	308,033,612		312,550,942

During the year ended December 31, 2024, the company completed nine in-fill business acquisitions, including three in the Advisory Services segment and six in the Global Workplace Solutions segment, with an aggregate purchase price of approximately $315 million in cash and non-cash consideration. Assets acquired primarily relate to intangible assets (customer relationships, backlog, trademarks and goodwill); other assets and liabilities assumed are working capital in nature. The results of operations of all acquisitions completed during the year ended 2024 have been included in the company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the company’s consolidated financial results and, therefore, pro-forma financial information has not been presented.


	Amount Assigned at Acquisition Date		Weighted-Average Life (in years)
Goodwill	$	130	N/A
Customer relationships	148		12 years
Other intangible assets	16		2 years
Total	$	294

During the year ended December 31, 2023, the company completed sixteen in-fill business acquisitions, including nine in the Advisory Services segment, six in the Global Workplace Solutions segment and one in the Real Estate Investments segment, with an aggregate purchase price of approximately $312 million in cash and non-cash consideration. Assets acquired and liabilities assumed are primarily working capital in nature. The results of operations of all acquisitions completed during the year ended 2023 have been included in the company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the company’s consolidated financial results and, therefore, pro-forma financial information has not been presented.