Brink’s Closes $860M Deal For Majority Stake In G4S

Cash management firm The Brink’s Company is acquiring a majority stake in the security services company G4S for $860 million (£660 million), The Brink’s Company announced on Wednesday (Feb. 26).

Brink’s, which is based in Richmond, Virginia, said the transaction adds 14 new markets to its realm: the Netherlands, Malaysia, Romania, Belgium, Ireland, Kuwait, the Czech Republic, the Philippines, the Dominican Republic, Cyprus, Indonesia, Lithuania, Estonia and Latvia.

The acquisition does not include the G4S Retail Cash Solutions business or the cash operations in South Africa, the U.K. and several smaller markets.

More than 50 percent of the enterprise value is anticipated to close within 60 days. The remaining will take place prior to Dec. 31 as the necessary licenses are acquired and other approvals are finalized.

“This transaction represents our largest acquisition to date and further demonstrates our disciplined approach to value-added capital allocation,” said Doug Pertz, president and CEO of Brink’s. “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 … operating profit growth initiatives into 14 new markets, including cash-intensive, emerging growth markets in Asia and Eastern Europe.”

The G4S operations generated roughly $800 million in 2019, with an operating profit of about $85 million and an adjusted EBITDA of approximately $115 million.

Pertz added that this “expanded global footprint” is expected to offer new opportunities for rapid expansion “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.”

Cash and debt from the acquiring company’s existing credit facility will finance the purchase. This is the firm’s fourteenth acquisition since March 2017. In total, these investments are anticipated to produce an adjusted EBITDA of around $300 million, “resulting in an average post-synergy purchase multiple of approximately 6.5 times,” according to the release.

Brink’s will reveal more about the acquisition and its projected role in the company’s three-year strategic plan at its Investor Day meeting in New York on June 1.

Earlier this month, Brink’s made a $9 million investment in MoneyGram in exchange for an approximate 5 percent stake.