The security Group G4S, has bought out ISS, a facilities management company from Denmark in a transaction worth £5.2 billion ($8.2 billion).
Nick Buckles, Chief Executive at G4S expressed, “We believe this acquisition will transform our business, significantly accelerate the delivery of our solutions strategy and create substantial value for shareholders.”
The mega million pound deal will open up some doors for G4S, as ISS don’t just offer security solutions to clients. The Danish facilities management company also offers a range of other services for both commercial and residential properties, which include:
• Cleaning
• Catering
• Gardening
• Pest control.
• Corporate
• Financial institutions
• Government
• Industrial
• Leisure and tourism
• Oil and gas
• Ports and airports
• Private Energy and utilities
• Retail
• Transport and logistics.
However, these two companies will overlap in around 40 countries, which at first could be quite costly but by 2014 G4S hopes to create savings worth around £100 million.
Speaking of the merge, Ole Andersen, Chairman of the Board of ISS expressed, “The combination of ISS and G4S is a good fit both industrially and culturally. Together they can increase their exposure to the significant growth opportunities in emerging markets and accelerate their efforts in the growing market opportunity for integrated facilities services. The corporate cultures complement each other and the highly competent senior management at both G4S and ISS will together create a strong and experienced team to lead the combined group.”
The combined revenues for the two companies will be worth around £16 billion per annum, which is more than double of what G4S earned in 2010. However, analyst Kevin Lapwood from Seymour Pierce has warned, “Although G4S has in the past proved effective at integrating large acquisitions, this will double the size of the group and there is bound to be some transactional risks in the short term.”
To fund the deal, G4S hopes to raise £2 billion from investors. This news set off a 17 per cent drop in shares. However the deal will create the largest security and facilities management group in the world, which should hopefully increase the value of shares.
Speaking of the deal, Jeff Gravenhorst, Chief Executive Officer at ISS stated, “We are ready for a new era together with G4S. By combining the two companies, which share history, culture and strategy, we will create an even stronger platform for the future.”
“Together the two companies will create an even stronger platform for the future,” Jeff added.
G4S as we know it today was formed in 2004, when Securicor plc and Group 4 Falck’s security business merged together. The group currently employs more than 625,000 employees in over 125 different countries and is the biggest employer on the London Stock Exchange. Although the company is worldwide, their head office is based in a commercial property in Crawley.
