HARTFORD, Conn., March 30 : United Technologies Corp. (NYSE:UTX), today announced an offer to purchase Rentokil Initial's Initial Electronic Security Group (IESG) for a purchase price of 595 million pounds Sterling ($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 . It is headquartered in Blackburn, U.K., with reported sales of approximately 300 million pounds, or $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. IESG sells integrated security systems, intrusion detection, CCTV, access control, and security software.
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. This acquisition strengthens particularly our position in Europe and expands our product and service offerings to a broader range of customers there. We expect our usual strong synergies and good financial returns from the combination," said UTC Chairman and Chief Executive Officer George David.
"We have at the same time decided to divest low-technology manned guarding businesses in Australia and the U.K.," David said. "These transactions together meaningfully transition UTC's fire and security portfolio toward higher margin and growth opportunities."
Since the acquisition of Chubb in 2003, UTC Fire & Security has divested four nationally based manned guarding businesses with total revenues of approximately $100 million. The combined revenues 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 and does not expect to divest these. These guarding businesses locally are combined with other security services provided by the company, and their combined revenues are approximately $100 million.
United Technologies Corp., based in Hartford, Connecticut, is a diversified company providing high technology products and services to the building and aerospace industries. Additional information is available on the Internet at www.utc.com/. UTC Fire & Security provides fire safety and security solutions to more than one million customers worldwide. Additional information is available on the Internet at http://www.utcfireandsecurity.com/
Source: United Technologies Corp.
CONTACT: John Moran UTC, +1-860-728-7062
Web site: http://www.utc.com/
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