G4S agrees £5.2bn deal for ISS
Danish outsourcing business to be acquired by the security services giant
By CFOWorld.co.uk | CFO UK | Published 09:58, 17 October 11
The security services group G4S said on Monday it had agreed to buy the Danish outsourcing business ISS in a deal worth £5.2 billion including debt.
The acquisition will establish the world’s largest security and facilities services group with annual revenues worth £15.9 billion based on the latest financial figures for both operations.
G4S said it will settle the deal in cash and shares and raise £1.88 billion, net of expenses, through a rights issue to help fund the process.
“We believe this acquisition will transform our business, significantly accelerate the delivery of our solutions strategy and create substantial value for shareholders,” said G4S chief executive Nick Buckles.
ISS, owned by Swedish private equity investor EQT and Goldman Sachs Capital Partners since 2007, pulled the plug on a planned $2.8 billion (£1.7 billion) IPO in March due to market turmoil.
G4S said it would provide significant growth opportunities and an estimated £100 million of annual pre-tax cost savings by 2014.
It added that the deal would deliver double-digit post-tax growth in return on investment capital and double-digit earnings per share accretion within three years.
G4S said the deal would enable it to maintain its current BBB credit rating.
Under the terms of the rights issue, shareholders can buy seven shares for each six they already hold at a price of 122 pence per share.
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