United Technologies Corp. has said that it has agreed to acquire Great Britain’s Initial Electronic Security Group, a unit of Rentokil Initial, for $1.16 billion in cash offer. The decision was taken as a part of United Technologies’ continued expansion into the electronic fire and security-monitoring business. In response Rentokil said its board was expected to accept the offer. However, the deal still is subject to regulatory approval and discussions with employee works councils in Europe.
London-based Rentokil has said that the clearance of Initial Electronic Security is expected to be completed by the end of June and profits from the cash sale would be used to pay down debt. Initial Electronic Security Group has generated its business to the tue of $580 million in sales last year. The company at present owns operations in Britain, the Netherlands, France and the United States and employs 3,400 people in more than 100 branch locations.
On the other hand, the sale is also part of a refocusing of Rentokil’s interests to concentrate on briskly growing businesses such as pest control and its City Link parcel unit. Over the past few months, Rentokil has redesigned its business portfolio, making acquisitions in pest control and parcel delivery and in its Asia Pacific businesses at the same time selling businesses in conferences and manned guarding.
Speaking on the issue Chief executive Doug Flynn of Rentokil said, ‘Completing this transaction will be a significant step towards focusing our resources on those businesses where we are best positioned to create additional value for shareholders’.
