Joe Sullivan may be about to shell out nine figures for a real estate investing giant.

Kiel Porter of Bloomberg reports that, per unnamed sources, Baltimore-based Legg Mason [profile] is in exclusive talks to buy an 80-percent stake in New York-based real estate investing giant Clarion Partners. Clarion chairman and CEO Stephen Furnary and other Clarion management would hang onto the other 20 percent of Clarion.

Joe Sullivan Legg Mason Chairman, Chief Executive Officer

Reuters also covered the news.

Clarion, which is backed by private equity shop Lightyear Capital, has about $38 billion in AUM. Bloomberg's sources estimate that Clarion had $70 million in EBITDA in 2015, and the deal would reportedly value the company at about $850 million. That translates into more than 12.14 times EBITDA, which Bloomberg compares to a median valuation of 7.09 for publicly-traded real estate investment shops in the U.S. In terms of Clarion's assets, the deal values the company at about 2.24 percent of AUM.

Clarion appears to have come a long way in just a few years. Bloomberg notes that Lightyear and Clarion management shelled out $100 million to spin Clarion out of ING back in 2011.

Stephen Furnary Clarion Partners Chairman, Chief Executive Officer

As for Legg, Sullivan (its CEO) has long talked up acquisitions as key part of his growth strategy for the publicly-traded, multi-boutique asset manager. 

Edited by: Neil Anderson, Managing Editor


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