G4S rejects offer to acquire its cash solutions businesses

G4SG4S plc, the world’s leading international secure outsourcing solutions group, has announced that on 22nd October, 2013 it received a non-binding, indicative and conditional offer of £1,550 million from Charterhouse Capital Partners LLP for its cash solutions business. The non-binding offer is subject to due diligence and financing and free of cash, debt, tax and pension liabilities.

The Board consider the Group’s cash solutions services to be core to G4S’ operations and strategic plans. The Board regards the nature and timing of the approach to be highly opportunistic and, following due consideration, with the assistance of financial advisers, the offer has been firmly rejected considering the strategic importance of the cash solutions businesses to G4S and because the Board believes the conditional offer fundamentally undervalues the business and its prospects. The company does not intend to pursue this non-binding, conditional offer and has notified Charterhouse Capital Partners LLP.

As communicated at the time of the August 2013 share placing, G4S is committed to invest in its core businesses, including cash solutions, which have strong opportunities for sustainable profitable growth. The cash solutions business is integral to G4S’ operations and strategic plans. It is unique in its scale and diversity, with unrivalled emerging markets exposure and strong characteristics, including:

Strong market growth

  • Cash in circulation is growing strongly. Between 2007 and 2011, cash in circulation grew at around 7% CAGR in G4S developed markets and 12% CAGR in its emerging markets
  • Cash usage is stable through economic downturns

G4S cash solutions has market leading positions in most of the markets in which it operates

  • G4S cash solutions businesses are number 1 or 2 in 61 out of 66 markets in which they operate
  • G4S cash solutions is a leading provider of value added services such as secure engineering and cash centre outsourcing
  • G4S has long term contracts and relationships with blue chip, global customers
  • G4S has developed attractive cash solutions technology

G4S cash solutions has an attractive financial profile

  • G4S has delivered competitive margins and growth rates
  • G4S is restructuring its UK & Ireland cash business to strengthen operating and financial performance

Synergies of operating secure solutions and cash solutions businesses

  • The group has cash businesses in more than 40 high growth emerging markets and in most of these markets the cash solutions businesses are integrated with secure solutions businesses
  • G4S has a secure solutions platform in other markets which provide the potential for further expansion of its cash solutions businesses
  • There are significant cost synergies and cross-selling opportunities between the cash solutions and secure solutions businesses

G4S Website