The long-awaited sale of facility services giant ISS has finally turned a corner after the holding company behind Lego and Ontario Teachers' Pension Plan paid €500m for a 26 per cent stake.
While ISS now counts two new shareholders, current owners EQT Partners and GS Capital Partners are not ceding any part of their interests in the sale despite numerous attempts to sell up over the past two years.
KIRKBI Invest, the holding company that owns 75 per cent of popular children's building toys Lego, and the private equity arm of Ontario Teachers' Pension Plan, Teachers' Private Capital, have co-invested.
ISS is readying itself for the December call date on its 11 per cent senior notes and the proceeds of the deal will be used to deleverage the business, which was de-listed from the Copenhagen Stock Exchange by EQT in 2005.
Since then the cleaning and security services provider has made more than 320 acquisitions, doubled its revenue and increased Ebitda by 65 per cent. Today ISS employs 525,000 people across 50 countries, making it the fourth-largest private employer in the world. In the first six months of the year, revenues reached DKr39.1bn (€5.25bn), up one per cent year on year, while operating profit reached DKr1.8bn.
ISS is a hot asset because of its potential in emerging markets, with its Asian operations showing double-digit growth in recent months.
G4S, which was left red-faced after admitting to not having enough staff to cover the London Olympics, was set to buy ISS from EQT and Goldman Sachs' private equity unit last October.
However, the security group was forced to terminate the deal after a shareholder backlash, investors voicing their concerns over integrating such a huge business while the economy slowed.
Now troubled G4S chief Nick Buckles faces further embarrassment as under the new deal ISS has been valued way below his bidding price last year.
Before seeking out a trade buyer, ISS's private equity owners had planned to take the company public and with debt now ready to be slashed in December those hopes have been rekindled, chairman Ole Andersen claiming it is in a position to IPO “within a few years”.