27th Feb 2020 11:36
(Alliance News) - G4S PLC on Wednesday said it has agreed to sell the majority of its conventional cash handling businesses for an enterprise value of GBP727 million.
Under the agreement with US private security firm Brink's Co, G4S will receive net cash proceeds of around GBP670 million and assign GBP60 million in net liabilities to Brink's.
G4S back in December 2018 said it had started reviewing its options for the separation of its Cash Solutions businesses from the group. In August, it said it would separate Cash Solutions in the first half of 2020, though has now decided against the move.
"This transaction represents an important milestone in the execution of our corporate strategy. The sale of these conventional cash businesses simplifies the group and enables G4S to focus on the growth of our core integrated security solutions business and the further development of our rapidly growing cash and payment technology business," said G4S Chief Executive Ashley Almanza.
"The proceeds from the sale of these conventional cash businesses reduce financial leverage and provide the group with the flexibility to continue to invest in our core businesses and we believe that the increased focus and financial strength will deliver material benefits for customers, shareholders and employees," Almanza added.
The sale of these businesses was judged to be "superior" to a demerger of the entire Cash Solutions division.
G4S concluded it was "in the best interests" of shareholders to further develop its payment and cash technology business, which includes Retail Cash Solutions, CASH360 and Deposita. It will also retain its UK cash solutions business.
"G4S has organically and rapidly built market-leading positions in the design and delivery of payment and cash technology solutions in some of the world's largest markets. The group will continue to develop this high growth, technology-focused business. In addition, the group will retain its UK cash solutions business," said G4S.
The payment and cash technology business, together with the retained conventional cash operations, represent 8% of the continuing group's total revenue.
The transaction means G4S's cash separation review has been successfully concluded, enabling the group to focus on the growth of its core security solutions business.
Shares in G4S closed 3.4% higher on Wednesday, and were trading 13% lower on Thursday at 169.10 pence.
By Lucy Heming; [email protected]
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