by Brianna Crandall — November 2, 2011—Today, global security giant G4S and FS Invest have together agreed to terminate their Share Purchase Agreement pursuant to G4S’s proposed acquisition of global integrated facilities services provider ISS for £5.2 billion. As reported previously on FMLink, the combined group would have had more than 1 million employees in over 130 countries and combined revenue of £15.9 billion in 2010, reportedly second only to Walmart in the private sector for the number of employees.
Ole Andersen, Chairman of the Board of ISS, commented, “In July our owner FS Invest was approached by G4S proposing to combine our two companies. There was a strong industrial and commercial rationale in the proposal and therefore we pursued the opportunity. However, it became evident after the announcement of the potential combination that G4S’s shareholders would not support the acquisition, due to the size and perceived complexity of the deal against the current macroeconomic backdrop. As a consequence our owner has agreed with G4S that the proposed acquisition should not proceed and we should get back to running our separate businesses and pursuing our respective goals.”
Jeff Gravenhorst, ISS’ Group CEO, commented, “The combination of ISS and G4S would have been a real game-changer in the global service industry. The proposed transaction and the approach from G4S have endorsed our track-record and our customer driven multiservice strategy. The last few weeks we have received much recognition of our people, our strong business performance, our emerging market footprint and our leadership in Integrated Facility Services. These are some of our greatest assets, and they are the foundation upon which we will continue to build our future The ISS Way.”
Denmark-based ISS offers integrated facilities services on an international scale in the areas of facilities management as well as cleaning, support, property, catering and security services. The company has 530,000 employees in over 50 countries, serving thousands of both public and private sector customers.
U.K.-based G4S, reportedly the world’s largest security company measured by revenues, employs more than 625,000 employees. It provides a variety of security-related services to both the public and private sectors, with operations in over 125 countries.
ISS will continue operating as an independent service provider and a global leader in integrated facilities services. This summer, ISS successfully amended and extended its debt facilities, enabling ISS to continue growing its business organically on a “business as usual” basis for several years to come. ISS’s recently released trading update shows organic growth for Q3 at 7.0%, marking the eighth consecutive quarter with an increasing organic growth rate. Organic growth for the first 9 months of 2011 was 6.4%. Growth has been particularly strong in emerging markets, where ISS has more than half of its employees.
Since its buy-out in 2005, ISS has roughly doubled its revenue, profit, number of employees and exposure to emerging markets. In the same period, ISS has increased the number of significant international Integrated Facility Services contracts from 2 to 11. Over the last 12 months ISS has won significant new contracts such as United Kingdom Foreign Commonwealth Office, Statoil, Shanghai Pudong International Airport, New South Wales Government Schools, Tesco, and Phillip Morris International.
ISS does not expect to incur material costs as a result of the termination of the proposed acquisition. Since FS Invest will continue its committed ownership of ISS, there will be no implications for holders of notes issued by the ISS Group.
