Global long term investors Ontario Teachers' Pension Plan (Teachers') and KIRKBI Invest A/S have agreed to invest 500 million (approximately DKK 3,721 million) in ISS, a leading global provider of facility services.
The current owners, funds advised by EQT Partners ('EQT') and GS Capital Partners funds ('GSCP'), are not selling any shares as part of the transaction, and will remain majority owners of ISS.
"The board of directors of ISS is very pleased to welcome such respected and successful long term investors to ISS. This is a testament to the strength and attractiveness of ISS as an investment opportunity.
"Together with our two majority owners, the board will work closely with the new investors on ISS' value creation. ISS is on track to significantly deleverage ahead of an IPO within a few years," said Ole Andersen, Chairman of ISS A/S.
"We have come a long way in our transformation over the last years, and this new investment, is a step further on the journey of making ISS the world's leading service company for our customers and for our more than 530,000 employees.
"We believe that ISS is the only company which has the platform from which we can integrate and self-deliver a complete set of facility services across the globe - recently proven by two of the largest contract wins in the history of our company.
"This new investment will further strengthen our Company's commercial and financial position," said Jeff Gravenhorst, Group CEO of ISS A/S.
"ISS is a global leader in the worldwide facility services industry. We see excellent opportunities to continue growing revenues as ISS is well placed to capture new customers and to provide integrated solutions to them," said Jo Taylor, Teachers' Private Capital Vice-President and Head of Teachers' London office.
"Management is experienced, with deep industry knowledge and has put the company on the right strategic path. We look forward to helping ISS expand successfully in both developed and emerging markets, and to introduce the executive team to the Teachers' international network."
"We have been following the performance of ISS for several years. ISS is a well-run company with strong values and leadership principles. We believe ISS is well positioned for further growth, particularly in emerging markets," said Søren Thorup Sørensen, CEO of KIRKBI A/S.
According to the agreement, subject to closing, Teachers' will invest approximately DKK 2,605 million and KIRKBI Invest A/S approximately DKK 1,116 million. The new investors will own approximately 26% of the ultimate holding company of ISS, with funds advised by EQT and by GSCP continuing to hold a majority interest in the business. The final price corresponds to DKK 105 per share in ISS A/S.
The proceeds from this investment are expected to be used to significantly deleverage the company by repaying the 11% Senior Notes due 2014 after the December 2012 call date.
Simultaneously with announcing this major investment, ISS is also releasing a trading update with preliminary results for the first six months of 2012.
Source: Ontario Teachers' Pension Plan