Zacks Analyst Blog Highlights: CB Richard Ellis Group Inc. ING Groep NV Vornado Realty Trust, JA Solar Holdings Co and MEMC Electronic Materials

Mar 09, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, March 9, 2011 /PRNewswire/ -- Analyst Blog features: CB Richard Ellis Group Inc. (NYSE: CBG), ING Groep NV (NYSE: ING), Vornado Realty Trust (NYSE: VNO), JA Solar Holdings Co. Ltd. (Nasdaq: JASO) and MEMC Electronic Materials Inc. (NYSE: WFR).


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Here are highlights from Tuesday's Analyst Blog:

CB Richard Ellis to Buy ING Biz

CB Richard Ellis Group Inc. (NYSE: CBG), the world's largest commercial real estate services company (on the basis of 2010 revenues), has recently obtained $800 million of new term loans under its credit facility to fund the acquisition of the majority stake in the real estate division of ING Groep NV (NYSE: ING), a leading financial services company.

The company has also modified the existing credit agreement to enjoy an additional flexibility and capitalize on other potential acquisition opportunities stemming from a recovery in commercial real estate market fundamentals.

CB Richard Ellis had earlier acquired the lion's share of ING Real Estate Investment Management operations in Europe and Asia, and Clarion Real Estate Securities – the U.S.-based global real estate listed securities business of ING, for $940 million in cash, leaving behind rival bidders such as Vornado Realty Trust (NYSE: VNO). The company also expects to incur additional costs of approximately $150 million relating to the transaction.

Over the past year, ING Real Estate Investment Management had been scurrying for potential bidders to raise funds by divesting its non-core business. The company offers a broad range of funds and separate accounts across private equity and listed shares (including hedge funds).

ING Real Estate's investment policy is based on an indigenous in-depth study provided by its global research team through top-down research that develops portfolio strategy and identifies target markets, and bottom-up research that integrates local market analysis into each investment decision. With a global portfolio of $59.8 billion (as of December 31, 2010), the company has been consistently ranked as one of the largest real estate managers of the world.

The real estate management business has recovered significantly in 2010 with a strong growth in assets under management after a testing time during the global downturn in 2008 and 2009. Consequently, with the acquisition, CB Richard Ellis has transformed itself as the largest investment manager and adviser in the world, creating a behemoth of sorts in the financial industry with nearly $100 billion of assets under management.

Post-acquisition, CB Richard Ellis' net debt is expected to be less than 2.25x EBITDA (earnings before interest, tax, depreciation and amortization), which is well within the maximum allowable covenant leverage ratio of 3.75x. ING Real Estate Investment Management would be merged with its existing fund management division, called CBRE Investors, which had over $37.6 billion assets under management as of December 31, 2010.

JA Solar-MEMC in Solar Joint Venture

JA Solar Holdings Co. Ltd. (Nasdaq: JASO) and MEMC Electronic Materials Inc.'s (NYSE: WFR) affiliate, MEMC Singapore, formed a 50-50 joint venture to build and operate a solar cell production facility in China.

The Phase One of the project will involve the building of a production facility with a capacity of 250 megawatts (MW) of photovoltaic (PV) cells located at JA Solar's Yangzhou site. In the following phases, total production capacity may be expanded up to 1GW. Phase one of the project is expected to begin in 2H11.

The solar companies are spending heavily to increase their production capacity and capturing a larger market share. JA Solar is one of the most cost-efficient solar producers in the world, with a geographically diverse customer base as well as silicon wafer supply agreements in place to feed its production.

In the near term, however, apprehensions over the tepid module demand in Europe, rising competition, wafer dependency, the financial stability of its customers and the oversupply of solar cells in the market will restrain the valuation of the company.

JA Solar presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

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