Allied Universal Acquired G4S for USD 5.28 Billion

The take-over saga of the British multinational security services company finally came to a close after the news that Allied Universal acquired G4S for USD 5.28 billion. The U.S. private security firm Allied Universal said on Tuesday around 79% of G4S shareholders accepted its bid to buy its British, ending the extended takeover war with Canada’s GardaWorld.

Allied Universal offered 245 pence per share over GardaWorld’s 235 pence apiece bid. The threshold was 50% plus one G4S share.

The merger between G4S and Allied Universal is going to create the world’s largest private security company. This entity should generate more than USD 18 billion in revenues and employ more than 750,000 security guards and other staff.

“This unique combination will offer customers exceptional service and provides employees with an exciting future. I would like to thank the Board and our shareholders for their support and to thank colleagues across G4S for their outstanding contribution to the successful re-positioning of G4S that has made this transaction possible. My team and I look forward to working with Allied to support a successful integration of the two businesses,” said Ashley Almanza, Chief Executive Officer of G4S.

Allied already announced its plans to evaluate options for the G4S prisons businesses, and has obtained the required antitrust regulatory approvals in the United States and European Union. However, the acquisition does not require approval from Britain since it obtained EU clearance before the Brexit deadline.

Allied Universal Acquired G4S – The Road to Integration

Allied’s interest in buying G4S comes after the British company agreed in July to pay 44 million pounds to the UK’s Serious Fraud Office to avert criminal charges after a long-running inquiry into electronic tagging contracts.

On the other hand, G4S struggled quite a bit in recent years with inconsistent earnings growth and reputational hits. In 2012, G4S failed a contract to supply 10,000 security guards for the London Olympic Games. This forced the UK government to draft in British military and police personnel to help out.

Allied’s currently employs more than 265,000 security guards, and offers remote video and alarm systems that protect sites across industries ranging from petrochemicals to retail in the US, Mexico and the UK.

The fact that Allied Universal acquired G4S should strengthen its current operations in the US and the UK. It should also extend their reach into markets in continental Europe, the Middle East and Africa.

The acquisition of G4S might prove a hard task for Allied in terms of integration. The company inherited G4S’s workforce of 558,000 employees, as well as operations in about 85 countries stretching across six continents.

“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. 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,” said Steve Jones, President and CEO of Allied Universal.