I am happy with the way matters are moving here.

G4S in 5.2bn merger

StockMarketWire.com

Security firm G4S has announced a 5.2 billion deal which it says will create the 'world's largest integrated security and facilities services group'.

The company announced the acquisition of ISS A/S for an enterprise value of around 5.2 billion. G4S also announced a 7 for 6 rights issue at 122p to raise approximately 2 billion.

The group put forward the following rationale for the deal saying it would:

* Create a global leader in integrated security and facilities services combining G4S's 2010 revenue of 7,397 million and ISS's 2010 revenue of 8,522 million * Accelerate delivery of G4S's strategy to provide integrated facilities services ("IFS") * Provide significant growth opportunities and an estimated 100 million of annual pre-tax cost savings by 2014 * Lead to an investment of 20 million per year by 2014 in creating service excellence centres to share best practice across the enlarged group * Be a financially compelling transaction expected to deliver, within three years: * double digit post-tax ROIC * double digit EPS accretion * no PBITA margin dilution * Be funded in a manner to allow G4S to retain a BBB (or equivalent) credit rating

It added that: 'The combination of G4S and ISS creates the world's largest integrated security and facilities services company, by revenue, profit, countries of operation and number of employees.'

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.'

'G4S and ISS have very similar cultures and strategic ambitions as well as a strong, shared vision for providing service excellence to customers across the security and facilities services spectrum. The acquisition will also provide significant opportunities for staff at all levels to develop and broaden their skills into complementary areas, as part of a team of more than 1 million G4S employees."

Interim Management Statement.


In the first nine months of 2011 overall revenues grew by 4% at actual exchange
rates compared to the same period last year and by 5% at constant exchange
rates. The group operating margin was slightly lower than the same period in
2010 at both actual and constant exchange rates.

Organic Growth
Overall organic growth was 5%,with 3% in developed markets and 9% in new
markets.

* In secure solutions, organic growth was 5% helped by a continued strong
performance in [UK integrated services] and new markets
* In cash solutions organic growth was 2% overall. New markets grew 10%.
Whilst in developed markets growth was still negative, it improved compared
to the first half of 2011.

Margins
Overall margins were slightly lower compared with the same period last year.

* Secure solutions margins were up slightly, in line with performance in the
first six months of 2011
* Cash solutions margins performed in line with the first six months of 2011
and were down slightly on the same period in 2010

Acquisitions & Divestments
During the first nine months of the year, G4S has invested 38m in deferred
consideration in respect of prior year acquisitions and 38m in capability-
building acquisitions such as surveillance, fraud, intelligence and
investigations services, offender monitoring technology and coin management
services.

Financial position
Our financial position continues to be strong and we remain on track to meet our
cash conversion target of 85% of PBITA for the full year.

what a fantastic drop in price - this is great news - fantastic buy in for day trade and beyond - yeeeeeeeeeeeehaaaaaaaaaaaaaaaaaaaaaaaaa

auction lol

now it gets interesting!

stop losses being triggered big time

what a bargain!!

trend heading towards bounce

Just had a dabble @221.67

gl skinny - it would be rude not to!!

auto trades flying through and being mopped up

lol when the dust settles people will realise they have got a 5.2billion additional acquisition in at a cost of a 2billion rights issue - now unless i am thick that is good business even if ri @ 122 - this was a strategic necessity - unfortuhately many stop loss casualties on the way

but they can buy back when they catch up

7 for 6 @ 122 do me fine - got to be in it to get it!! lol

bouncing a bit now

at last people are waking up - sp heading north - blimey that took some time! gla

skinny - kerrrrrrrrchinnnnnnnnnnnnnnnnnnggggggggggggggggggg

gl

auction

today better!!!

well chuffed - what a result today - yeeeeeeeeeeeeeeehaaaaaaaaaaaaaaa

skinny did you sell today or still hanging on - gl

I had a limit in which didn't get hit - so I'm still in.

Graham Ruddick, 6:16, Wednesday 19 October 2011

The chief executive of G4S (Other OTC: GFSZF.PK - news) will fly to America on Wednesday in an attempt to secure backing from key shareholders after City analysts warned his 5.2bn deal to buy ISS is at risk of being voted down.

On Tuesday, G4S was hit by a string of downgrades as analysts expressed concern at the amount of debt the security group will assume, how it will manage 1.2m staff, and why the group, based in Crawley, West Sussex, is moving away from its strength in security.

Analysts at Citi raised the prospect of G4S shareholders rejecting the deal and the 2bn rights issue which will finance it, upgrading their rating on the company partly because the acquisition could collapse.

Nick Buckles, the chief executive of G4S, is understood to be travelling to the US to meet key investors such as Harris Associates, BlackRock (NYSE: BLK - news) and Marathon Asset Management, who are top 10 shareholders.

The leading investors in G4S were quiet on the deal on Tuesday but shares in the group recovered 9.8pc, or 21.6p, to 241p. G4S shares crashed by 22pc on Monday after the company announced it wanted to buy the cleaning and catering provider ISS.

Copenhagen-based ISS is owned by EQT Partners, the private equity arm of Sweden's Wallenberg family, and GS Capital Partners, Goldman Sach's investment division. G4S will pay the investors 1.5bn in cash and shares, leaving them with a stake of 11.3pc in the enlarged company, and assume 3.7bn of debt.

The prospectus for the deal shows ISS has lost money on a pre-tax level for at least the past three years, despite revenues of more than 7bn, because of financing costs on the debt.

Citi said it was basing its 300p target price on G4S not acquiring ISS and adding "75pc of attending votes at the November (Stuttgart: A0Z24E - news) 2 emergency general meeting [EGM] are required to approve the 390m G4S share issue to ISS's vendors. With EGM attendance unlikely to reach 100pc, perhaps only 15pc to 20pc of outstanding equity would be needed to block the transaction."

David Brockton, at Espirito Santo, warned: "From an opportunity/cost perspective, the acquisition of ISS will limit the group's ability to deploy capital to accelerate growth in other business areas, with faster underlying growth eg emerging market security. As such, we are yet to be convinced that the end justifies the means."