G4S agrees to be acquired by Allied Universal

Dec. 8, 2020
$5B deal brings six-month long bidding war for company to a close

After initially declining a $4.2 billion deal put forth by Allied Universal last month, G4S on Tuesday announced that it has agreed to the terms of a new cash offer from the company that will pay G4S shareholders 245 pence per share.

The offer, which was made by Atlas UK Bidco Limited (Allied Bidco), a newly incorporated entity created for the purposes of implementing the offer and indirectly controlled by Allied Universal, values G4S at £3.8 billion ($5 billion). The combination of Allied Universal and G4S will create a combined business that is expected to generate approximately $18 billion in annual revenues. The company will also have a global workforce of more than 750,000 people with operations in 85 countries.

“The G4S Board is confident in the long-term prospects of the business and believes this offer represents an excellent opportunity to create a leading global security company, for shareholders to realize value for their investment at an attractive premium, while also ensuring the future success of G4S for employees, customers and other stakeholders. We are therefore unanimously recommending it to our shareholders,” said John Connolly, Chairman of the G4S board.

“Our businesses know each other well, we share a similar culture and values, and I am excited about what the combination of Allied Universal and G4S can deliver,” added Steve Jones, President and CEO of Allied Universal.  “G4S has an excellent service offering, an enviable global customer portfolio and it is led by a highly experienced management team. We have been impressed by the recent transformation of G4S which alongside our successful acquisition track record, underpins our confidence of ensuring a seamless integration of the two businesses. Combined, we will have over 100 years of industry experience and a more extensive global network in terms of people, customers and capabilities.”

The acceptance of the offer ends a nearly six-month long bidding war for G4S, which began in mid-June when Canada-based GardaWard (Garda) offered to buy the company for 145 pence per share. Garda would subsequently revise its offer twice over the next several months, eventually agreeing to pay $3.8 billion for the company but that too was rejected.

Having been rebuffed by the G4S board, Garda would appeal directly to the company’s shareholders as part of a hostile takeover bid in October, offering to pay 190 pence per share. Allied Universal entered the fray last month and offered to buy G4S for £3.25 billion ($4.22 billion) but that offer also fell short of what G4S leaders were looking for.

Prior to accepting the most recent offer from Allied Universal, G4S noted in a statement announcing the deal that earlier this month, Garda, through its wholly-owned subsidiary Fleming Capital Securities, upped its offer to 235 pence per share but noted that it would not increase it any further. As of Dec. 1, 2020, Fleming had received acceptances of the Garda offer in respect to nearly 27 million G4S shares, representing approximately 1.73% of the company’s issued share capital.

According to the statement, Allied Universal intends to maintain a UK headquarters in London that will serve as the “Enlarged Group’s” headquarters for all international operations outside of the North America. In addition, based on the geographic footprints of G4S and Allied Universal, the companies said in the statement that they do not expect there to be a significant number of overlapping functions outside of North America.    

Allied Bidco has also reportedly already cleared U.S. antitrust review and the company is currently in the process of acquiring all other antitrust and regulatory approvals. The deal is expected to close during the first quarter of 2021.