Banking Business News

Brink’s to Acquire Majority of G4S Cash Operations for $860 Million

Brink's to Acquire Majority of G4S Cash Operations for $860 Million

Core Acquisition Adds 14 New Markets; 2019 Revenue of $800 Million
Strategic Fit and Strong Platform for Future Growth
Expected to be Accretive to Non-GAAP Earnings in 2020
Management Hosting Conference Call Today at 10:30 a.m. ET

The Brink’s Company , the global leader in total cash management, route-based secure logistics and payment solutions, announced that it has agreed to purchase for approximately $860 million (£660 million) the majority of the cash operations of U.K.-based G4S plc , a global security and cash management company.

The G4S operations to be acquired generated pro forma 2019 revenue of approximately $800 million, operating profit of approximately $85 million and adjusted EBITDA of approximately $115 million. The transaction adds 14 new markets to the existing Brink’s footprint. It excludes the entire G4S Retail Cash Solutions business and cash operations in the U.K., South Africa and several smaller markets.

The acquisition is expected to be accretive to non-GAAP earnings in 2020 and reflects a purchase multiple of approximately 7.5 times 2019 pro forma adjusted EBITDA. Management expects to achieve cost-based synergies over the next two years that would result in a post-synergy purchase multiple of approximately 6.5 times. On a fully-synergized pro forma basis, Brink’s 2020 revenue would be approximately $4.6 billion with adjusted EBITDA of approximately $745 million.

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Doug Pertz, president and chief executive officer of Brink’s, said: “This transaction represents our largest acquisition to date and further demonstrates our disciplined approach to value-added capital allocation.  The acquisition of these select G4S cash operations is an excellent strategic fit that provides a strong platform for substantial growth. It positions us to extend our proven Strategy 1.0 organic revenue and operating profit growth initiatives into 14 new markets including cash-intensive, emerging growth markets in Asia and Eastern Europe.

“In addition, our expanded global footprint is expected to provide new avenues for accelerated growth as we begin to execute our Strategy 2.0 initiatives, targeted to further penetrate the global cash ecosystem with new high-margin, less capital-intensive solutions.  We look forward to closing the transaction, executing our strategic initiatives, and driving substantial revenue and profit growth.”

The acquisition will be completed in multiple phases, with more than half of the enterprise value expected to close within 60 days. The remaining closings are expected to be completed before December 31, 2020 based on the estimated timing required to obtain necessary licenses and other approvals.

The acquisition includes cash management operations in 14 new markets: the Netherlands, Malaysia, Romania, Belgium, Ireland, Kuwait, the Czech Republic, the Philippines, the Dominican Republic, Cyprus, Indonesia, Lithuania, Estonia and Latvia.

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The acquisition will be financed by cash and debt from the company’s existing credit facility. Brink’s may access the debt markets in the U.S. and/or Europe to reload borrowing capacity. This transaction will be the company’s fourteenth acquisition since March 2017, for combined consideration of approximately $1.95 billion.  In total, these acquisitions are expected to generate adjusted EBITDA of approximately $300 million, resulting in an average post-synergy purchase multiple of approximately 6.5 times.

Brink’s plans to disclose additional information about the acquisition and its expected contribution to the company’s three-year strategic plan (2020 – 2022) at its Investor Day meeting in New York on June 1.

BofA Securities is acting as exclusive financial adviser, and Allen & Overy LLP is acting as legal adviser to Brink’s.

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