Creating what is arguably the largest facilities services business in the world, G4S plc has bought ISS from its investors. The deal values ISS at around £5.2bn.
The sellers will receive half of the purchase price in cash and half in new shares in the enlarged G4S group, a stake expected to represent approximately 11% of the group’s share capital. Shares in the enlarged group will be traded on the stock exchanges in London and Copenhagen, and ISS investor FS Invest’s shares will be subject to a lock-up restriction for nine months.
The deal puts to rest the ISS group’s long-planned return to a listing for its own shares.
The Copenhagen-based ISS described the deal as ‘strategically compelling’, saying it would create a global leader in integrated security and facilities services with continued strong growth potential.
The combined group will have more than 1 million employees in more than 130 countries, with a combined revenue of £15.9bn in 2010. Around 25% of the combined revenue of the group will come from fast-growing emerging economies.
Ole Andersen, Chairman of the Board of ISS, commented: “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.”
ISS Group CEO Jeff Gravenhorst added that the new business is expecting ‘significant growth opportunities and synergies to be achieved in the coming years’.
Gravenhorst will join the G4S board of directors and will head up the combined European operations as Chief Operating Officer and Regional CEO Europe.
G4S Chief Executive Nick Buckles will lead the expanded group.
The transaction requires approval of G4S shareholders, as well as certain regulatory authorities.