Securicor recently announced that Securicor International has signed an agreement with Gray Security Services, a South African company quoted on the Johannesburg Stock Exchange, to acquire the entire issued share capital of Gray. The acquisition would be achieved by means of a scheme of arrangement between Gray and its shareholders which, if implemented, would result in Gray's shares being delisted from the JSE.
Upon the successful implementation of the Scheme, Gray shareholders would receive a cash consideration of approximately R2,43 per share. The aggregate consideration amounts to approximately R468m.
If the scheme fails for any reason, Securicor will automatically make a general offer to the shareholders of Gray on the same terms and
conditions as those under the scheme in so far as they are applicable.
Gray is the largest provider of guarding services in South Africa with operations concentrated on the high value areas of mining, airlines, petro-chemicals, retail and leisure. It also operates, through subsidiary companies, in a number of other African territories, in the United Kingdom and in the USA.
In the year to 31 August 1999, Gray had a turnover of R532m of which R412m was in South Africa itself. In the same period, it recorded profit before interest and tax of R44m and profit before tax of R28m.
The Chairman of Gray Security Services, Dick Aubin, said he was delighted with the transaction which would have wide ranging and positive implications for the security industry in South Africa and the rest of the continent, for black empowerment in South Africa, and for all Gray stakeholders.
"The transaction opens up opportunities which range from new and meaningful black empowerment partnership possibilities, to a quantum leap in our ability to become global players in the multi-billion dollar security industry almost overnight," Aubin said.
"During the three months of negotiations with Securicor we have been very impressed with the diversity and professionalism of their operations, and the integrity with which they go about conducting their business.
"The agreement opens up a whole new vista of opportunity for our people who will now be part of an operation with a workforce of 40 000, while those who hold shares will be decidedly better off. The ownership transition will be seamless, and our personnel position will remain unchanged. All in all it is a marriage about which all of us are extremely excited," Aubin said.
The obligation of Securicor to proceed with and implement the scheme is subject to a number of conditions precedent, including completion by Securicor of satisfactory due diligence, approval from the South African competition authorities, and agreement being reached with certain key employee shareholders of Gray to reinvest the proceeds from the sale of their shares into a new South African holding company into which Gray's assets would be transferred.
Nick Buckles, Chief Executive of Securicor's Security Division, said: "The acquisition of Gray Security Services will position us as the leading provider of security solutions to the fast-growing African market.
"We intend to harness the innovative leadership of the Gray management team to maximise the profitability and growth potential of our African business portfolio. This acquisition demonstrates our determination to become a major global provider of integrated security services whilst at the same time it will, through the absorption of Gray's UK guarding turnover, re-establish Securicor's position as the number one UK guarding company."
It is expected that the transaction will be completed before the end of December 2000.
For details contact Gray Security Services, (021) 447 2306.
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