The announcement follows reports in the national press that suggested several companies could be bidding for the company, which provides security at prisons and custody suites in the UK.
The total buyout includes a payment of about GB pound 158m for the entire issued share capital of GSL’s holding company, De Facto, and an assumed maximum of GB pound 197m in net debt and working capital.
A G4S statement said the company expects the acquisition to result in annual running rate cost synergies of “not less than GB pound 7m” and to be earnings-enhancing in 2008.
G4S sees the deal as an opportunity to broaden its expertise in key markets – including the government sector – and one which will offer its customers more choice.
GSL’s experience will add to G4S’ existing Justice Service activities, particularly in the UK’s custodial, secure escorting, immigration and police sectors.
“The acquisition of GSL fits right into the heart of our strategy and is typical of our plans to acquire expertise in key service lines and sectors, enabling us to further develop our offer to our customers,” said Nick Buckles, chief executive officer of G4S.
“Over time, we expect to move towards a higher proportion of long term, recurring revenue contracts with G4S taking a broader range of responsibility for customers’ risk management and protection.
“The addition of GSL to our organisation is a significant step in this next phase of development.”
The acquisition of the company, which is expected to generate sales of GB pound 423 million by the end of 2007, is subject to approval from the European Commission and the South African Competition Commission.