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ISS acquires leading technical services business, wins service contract and award
In line with its stated strategy, ISS acquires the UK, Ireland & European operations of engineering firm GS Hall plc
“This is the right company in the right market at the right time for us,” said Jeff Gravenhorst, Group CEO, ISS A/S. “As previously stated, we will support our strategic progress by making selective competence-enhancing acquisitions. This acquisition will strengthen our ability to meet the increasing demand for integrated facility solutions where technical services is an important and deciding component for the customer in choosing the right partner. Furthermore, the acquisition will enhance our offering in energy management which is an emerging demand from our customers,” Gravenhorst added.
Enterprise value is GBP 53 million of which GBP 6 million is an earn-out to potentially be paid during H1 2015, in whole or in part, depending on the financial performance of the business. With EBITA margins in excess of 8%, the current margins of GSH are above ISS average. The transaction will be funded through existing debt facilities and does not impact expected dividend payments from ISS for fiscal year 2014. The transaction is final and unconditional as of today.
“ISS is a perfect fit for our business. This transaction will improve the self-delivery of technical services within integrated facilities services contracts and provide our colleagues with substantial opportunities for career progression,” said Clive Clarke, UK & Ireland MD of GSH.
A market worth over DKK 1 trillion
Established in 1895, GSH has a rich heritage and a strong position in the mechanical and electrical services market in the UK where it has focused on the self-delivery of services to key accounts in, among others, the Business Service & IT and Retail & Wholesale customer segments.
“GSH and its management team have an excellent strategic fit with our existing UK IFS and technical services business and we expect to achieve both revenue and cost synergies. A strengthened foundation in the UK will also facilitate the scaling of technical capabilities across Europe, thus enhancing further growth opportunities in our existing technical services business on the continent,” said Henrik Andersen, Group COO of Europe, Middle East and Africa.
“Technical services is becoming a central part of integrated facility services and the technical services market in Europe is estimated to be worth over DKK 1 trillion where customers increasingly look across borders and continents for coverage. This transaction will provide good growth opportunities in this market,” the Group COO added.
LATAM Airlines Group (LAN) has awarded ISS a contract to provide cleaning services, and renewed its current property and support services for three years, now offering cleaning, landscaping, support and building maintenance services on 263,382 square meters at 27 sites, with a total of 225 ISS employees
LATAM Airlines Group is the largest airline in Latin America, with flights to South America, North America, Europe and Oceania.
Eduardo Rojas, Country Manager ISS Chile, said: - ISS has provided cleaning services to LAN for the past 20 years and an IFS solution since 2010. Last March, our cleaning service contract with LAN was discontinued, and we are very happy to have regained the contract. It has been a learning process for the whole organisation, from site supervisors to top managers. Nine months later, we are proud to confirm that building the right value proposition and really understanding the customer paired with the right capabilities, has allowed ISS to become a long-term partner to LAN.
Sebastian Myler, Infrastructure Manager LAN, said: - LAN chose ISS as a strategic partner, because they have known our company over time, both in cleaning services as well as maintenance. ISS is always willing to help the client, with good disposition and customer service, focused on solving problems, adding value to their management. The new contract started on 1 January 2015.
The strong reputation as an integrated service provider and the success in contract wins and retention has led to ISS Australia being named ‘Integrated Facilities Management Company of the Year’ in the 2014 Frost & Sullivan Best Practices Awards
The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global markets for demonstrating outstanding performance. Every year, they track more than 250,000 companies to identify best practices and excellence across a variety of facets, ranging from growth and competitive strategy to customer satisfaction and technology innovation. The Excellence Awards seek to recognise companies and individuals that have pushed the boundaries of excellence and outshone their competitors in the market.
Country Manager of ISS Australia & New Zealand, Dane Hudson, said: – We are delighted to receive this accolade from Frost & Sullivan as it shows the journey we have been on, to shift from single service excellence to delivering integrated contracts, providing further efficiencies for our customers. We have a solid business platform and have seen significant growth, which is also testament to the fantastic teams we have in place and the value we bring to over 1,000 customers across the country. We recently held our annual employee survey, with over half our workforce taking part, and were delighted to see another year on year improvement in our engagement score. We truly believe that happy employees create happy customers.
Participants in the Awards were evaluated on two key factors, visionary innovation and performance and customer impact. The award is bestowed on the company that is ranked number one among all industry competitors.
Ai Dee Yoo, Research Associate at Frost & Sullivan, commented: – Since 2002, ISS has built a good reputation in Australia’s integrated facility service provider (IFS) market. The company’s strong presence is a result of their capability in IFS self-delivery and provision of customised service solutions based on its robust management systems. ISS leveraged its international best practices and global experience to the Australian market, resulting in holistic customer experience through value for money services and operational cost savings. In addition, customers were able to receive enhanced service efficiency through output-based service contracts.
In 2014, ISS’ New Zealand Business won ‘Facility Management Company of the Year’ for NZ. ISS Asia Pacific region won 2014 Frost & Sullivan Best Facility Management Company of The Year for the second consecutive year, and also received this year’s Growth Excellence Leadership Award.
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