ISS, a private equity-backed Danish outsourcing firm, has formally ended talks for an $8.5 billion buyout by private equity firm Apax, Reuters reported. Goldman Sachs and Swedish buyout firm EQT currently own ISS, and will opt for a share flotation instead of an acquisition, Reuters said.
(Reuters) – Danish outsourcing firm ISS [ISSHG.UL] has broken off talks for an $8.5 billion takeover by private equity firm Apax and will seek a share flotation instead, a spokesman for the company said on Friday.
The company’s owners, Goldman Sachs (GS.N) and Swedish buyout firm EQT, had previously considered an initial public share offer before pursuing the outright sale of the group, one of the world’s largest facilities services firms which employs more than 500,000 people.
A sale to Apax would have been the largest leveraged buyout since the credit crisis struck.
“The owners of the company believe there is greater value to be gained for shareholders by doing an IPO,” the spokesman said.
ISS has written to Apax to formally break off talks, he added.
No one at Apax, EQT or Goldman Sachs was immediately available to comment.
ISS’s chief financial officer was quoted earlier on Friday in British newspaper The Daily Telegraph as saying the company owners now favour an IPO.
The Copenhagen share market has proved more receptive than many to private equity-backed flotations in recent weeks, swallowing the $2.1 billion IPO of Danish jewellery maker Pandora (PNDORA.CO) and a $2.2 billion re-listing by telecoms giant TDC (TDC.CO) in the fourth quarter — two of Europe’s biggest equity offerings of 2010.
Last month a person familiar with the situation told Reuters that Apax was in exclusive talks to buy ISS, after offering $8.5 billion for the business.
The buyout firm had beaten a consortium of Blackstone (BX.N), Bain Capital, Nordic Capital and Clayton Dubilier & Rice, and a pairing of CVC [CVC.UL] and Apollo Management [APOLO.UL] to enter exclusive talks.
ISS operates in more than 50 countries, cleaning offices, cooking school meals and providing security for people and properties.
Its main rivals are UK security services group G4S (GFS.L), French catering and services company Sodexho SA (EXHO.PA), UK catering services provider Compass Group (CPG.L) and Swedish security services company Securitas AB (SECUb.ST).
Goldman Sachs’s private equity arm and EQT bought ISS in a leveraged buyout in 2005. That deal valued the business at $5.3 billion including debt, according to Thomson Reuters data. (By Simon Meads; Additional reporting by Quentin Webb, Kylie MacLellan and Caroline Copley; Editing by Greg Mahlich)