United Technologies Corp. (UTC), parent company of Lenel, Chubb and other fire and security businesses, has made an offer to purchase Rentokil Initial’s Initial Electronic Security Group (IESG) for $1.16 billion. Rentokil Initial’s Board of Directors has indicated its intention to accept UTC’s offer subject to satisfaction of customary conditions. UTC also announced its intention to divest its manned guarding businesses in the United Kingdom and Australia.
IESG is the electronic security division of Rentokil Initial, selling integrated security systems, intrusion detection, CCTV, access control and security software. It is headquartered in Blackburn, U.K., with reported sales of approximately $580 million in 2006, and operating margins of about 14 percent. IESG has operations in the U.K., Netherlands, France and the U.S. and employs 3,400 people in more than 100 branch locations.
The acquisition is subject to regulatory approval and discussions with employee works councils in Europe.
“This acquisition builds UTC’s scale and capability in the electronic security business which we regard as attractive in national markets where we have significant presence,” says UTC Chairman and Chief Executive Officer George David. “This acquisition strengthens particularly our position in Europe and expands our product and service offerings to a broader range of customers there.”
Since acquiring Chubb in 2003, UTC Fire & Security has divested four nationally based manned guarding businesses with total revenues of about $100 million. The combined revenue of the guarding businesses in Australia and the U.K. is slightly less than $550 million. The company has smaller guarding businesses in Hong Kong, Thailand, Singapore, New Zealand, Macau, Ireland and Spain, which are not expected to be divested, according to a company statement.
