G4S becomes world's largest integrated security solutions group
The acquisition brings together two market leading businesses with complementary strategies and service lines - combining G4S's 2010 revenue of £7,397m and ISS's 2010 revenue of £8,522m - to create the world’s largest integrated security and facilities services company, by revenue, profit, countries of operation and number of employees. It also makes it the largest employer in Europe.
G4S - which is providing security for the London 2012 Olympics - sees the combination of G4S and ISS as a significant opportunity to accelerate delivery of G4S’s integrated facilities services (IFS) or ‘solutions’ strategy, in response to customer demand and a perceived market supply gap for IFS. IFS is the provision of multi-service types under one contract, together with on-site management through a single point of contact with the customer, which allows the facilities services functions to be integrated at the customer’s premises.
Nick Buckles (above), G4S’s CEO, 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 one million G4S employees.”
As G4S and ISS operate in complementary geographies with overlaps in over 40 countries, it is expected the acquisition will provide significant opportunities for cross-selling. In addition, there are a number of countries where only one business is present today yielding opportunities to broaden the enlarged G4S’s offer in those markets. In particular, G4S will be able to build upon ISS’s presence in European countries such as Spain, Italy and Switzerland, while G4S’s presence throughout the Middle East and Africa will provide a platform from which to launch and develop ISS’s service lines in those regions.
The group will continue to have significant exposure to faster growing developing markets, representing around a quarter of combined G4S and ISS 2010 revenue and targeted to increase to 50% of revenue by 2019. In the first half of 2011, G4S’s New Markets businesses delivered organic growth of 9% and ISS’s Emerging Markets delivered strong organic growth of 14%.
Alf Duch-Pedersen, Chairman of G4S, said: “This acquisition brings together two high quality companies and management teams with a very strong business performance and integration track record. We have a compelling strategy, significant experience in meeting a wide range of customer needs and in motivating a large and diverse workforce to deliver excellent service to our customers.”
