UK Restructuring at Play with Separation of Cash Solutions Business
In a payments landscape dominated by digital options, G4S Plc (GFS LN) announced on December 13, 2018 a strategic review of the separation (through either a Spinoff or IPO) of its Cash Solutions business, which includes Cash 360 machines operated by retailers and the cash transport operations. We believe the separation will bring growth and increased focus to both businesses, unlocking substantial shareholder value in the long-term.What's Happening? The Edge Ingredients...
G4S Plc (GFS LN), the world’s leading international security solutions group with a presence across more than 90 geographies, has increasingly frustrated investors with the slow pace of recovery. The company’s four-and-a-half-year-long turnaround has led to the reorganization of the group (completed January 1, 2018), which resulted in the consolidation of the Secure Solutions business and created a separate global cash solutions division. GFS is a developing story, and while the company prepares to separate its cash solutions business (~17% of group revenues), there are other catalysts that may play out. We believe there may be a management change given that earnings over the last few years have been volatile and the turnaround by the current team has been slow. Current GFS CEO Ashley Almanza has been at the helm since 2013, and while we appreciate that he steadied the ship when he took over, there has been little progress over the past five years in terms of shareholder returns (-3% on an adjusted basis). The separation is expected to be completed in FY19.
Additionally, given current market dynamics, there is potential for consolidation in the sector and we believe the separated cash solutions business will be lucrative to peers like The Brink’s Company (BCO), Prosegur Cash SA (CASH SM) and Loomis AB (LOOMB SS). Looking at recent deals in the space, BCO recently acquired CIT services company Dunbar for roughly $500m, while CASH has a mandate from investors to lead industry consolidation and recently acquired U.S. based Command Security Corp in September 2018.
G4S is a security company that provides security and related services. Co.'s Secure Solutions products are comprised mainly of manned security and facilities management services, and its Cash Solutions products are comprised mainly of physical cash management services. Within the Secure Solutions services, Co. also provides: technology services, comprising the supply, installation and monitoring of alarm systems, and security and building systems technology; facilities management; and care and justice services. Within the Cash Solutions services, Co. also provides technology services to retailers, comprising hardware and software for customer cash management and related services.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.