G4S in £5.2bn Danish deal
The operator of Birmingham prison has bought a Danish company for £5.2bn. G4S said the deal would create the "world's largest integrated security and facilities services group".
G4S bought ISS AS from private equity companies EQT and GS Capital in a bid to offer extended services such as cleaning to its clients.
It also announced plans to raise more than £2bn through a seven for six rights issue at 122p.
The deal will bring in an estimated £100m of annual pre-tax cost savings by 2014, said G4S. It added that by the same year, an investment of £20m would have been made by creating "service excellence centres" to share practices across the company.
G4S's chief executive officer, Nick Buckles, said: "We are excited to announce the acquisition of ISS to create the world's largest integrated security and facilities services group. Since G4S was created in 2004, we have grown our business significantly and have expanded our service offering beyond our traditional security heritage into much broader areas of facilities services and outsourcing to meet growing customer needs.
"We believe this acquisition will transform our business, significantly accelerate the delivery of our solutions strategy and create substantial value for shareholders."
Once the deal has completed, G4S will employ more than 1.2 million people. The company was already the FTSE 100 Index's biggest employer,
Management of HMP Birmingham was transferred to G4S earlier this month (October), following a six-month transition process.
The category B prison, which accommodates about 1,450 male prisoners, is one of five in the UK to be under the watch of G4S Care and Justice Services.
It was the first Prison Service site to transfer its management to the private sector. G4S recorded revenue of £7.4bn in 20101, while ISS's turnover stood at £8.5bn.
Deutsche Bank AG, Royal Bank of Scotland Plc and HSBC Holdings are underwriting new debt facilities for the multi-billion pound deal.
Deutsch Bank, Greenhill, HSBC and RBS Hoare Govett all advised on the deal.
