Company Announcements

Acquisition of leading Australian facilities management company

17 December 2020

Serco Group plc

LEI: 549300PT2CIHYN5GWJ21

Serco Group plc ('Serco' or 'the Group'), the international provider of services to governments, through its Australian subsidiary, Serco Group Pty Limited, has reached agreement to acquire Facilities First Australia Holdings Pty Limited (FFA).  The business is to be acquired for an enterprise value of A$76.5m (£43m), subject to standard net working capital adjustments, with the consideration to be satisfied from Serco's existing debt facilities.  FFA's revenue for the year ended June 2020 was A$282m (£156m), adjusted EBITDA was approximately A$12m and Underlying Trading Profit around A$11m (£6m); the transaction represents a multiple of 6.2x June 20 adjusted EBITDA and 6.8x June 20 adjusted EBIT.  The acquisition is expected to be accretive to earnings in 2021; as a consequence of the transaction Serco Group leverage will increase by approximately 0.2x, from the 0.5x the Group expects to see at 31 December 2020.  The acquisition has received Australian Foreign Investment Review Board approval and is expected to complete on 4 January 2021.

FFA is a specialist provider of cleaning, facility maintenance and management services to government; over 80% of its revenues come from long-term government contracts and it has an order book of around A$434m (£240m).  Its 2,500 employees and experienced management team bring to Serco new skills and reach in government facilities management, which is expected to see a significant amount of bidding opportunities in the coming years.

Commenting on the acquisition, Rupert Soames, Serco Group Chief Executive, said: "This acquisition adds expertise and heft to our facilities management operations in Australia, while retaining our government focus.  The combination of Serco and Facilities First will enable Serco Australia to target a significant pipeline of new opportunities which we expect to mature in the next few years.  We welcome the employees and management of FFA as they join Serco and look forward to working with them as we further grow our Australian business." 

Ends

For further information please contact:

Paul Checketts, Head of Investor Relations, tel: +44 (0) 7718 195 074 or email: paul.checketts@serco.com

Marcus De Ville, Head of Media Relations, tel: +44 (0) 7738 898 550 or email: marcus.deville@serco.com

About Serco

Serco is a leading provider of public services. Our customers are governments or others operating in the public sector.  We gain scale, expertise and diversification by operating internationally across five sectors and four geographies: Defence, Justice & Immigration, Transport, Health and Citizen Services, delivered in UK & Europe, North America, Asia Pacific and the Middle East. More information can be found at www.serco.com

Forward looking statements

This announcement contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature.  All statements other than statements of historical fact are forward-looking statements.  Generally, words such as "expect", "anticipate", "may", "could", "should", "will", "aspire", "aim", "plan", "target", "goal", "ambition", "intend" and similar expressions identify forward looking-statements.  By their nature, these forward-looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements.  Factors which may cause future outcomes to differ from those foreseen or implied in forward-looking statements include, but are not limited to: general economic conditions and business conditions in Serco's markets; contracts awarded to Serco; customers' acceptance of Serco's products and services; operational problems; the actions of competitors, trading partners, creditors, rating agencies and others; the success or otherwise of partnering; changes in laws and governmental regulations; regulatory or legal actions, including the types of enforcement action pursued and the nature of remedies sought or imposed; the receipt of relevant third party and/or regulatory approvals; exchange rate fluctuations; the development and use of new technology; changes in public expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks; and pandemics, epidemics or natural disasters.  Many of these factors are beyond Serco's control or influence.  These forward-looking statements speak only as of the date of this announcement and have not been audited or otherwise independently verified.  Past performance should not be taken as an indication or guarantee of future results and no representation or warranty, express or implied, is made regarding future performance.  Except as required by any applicable law or regulation, Serco expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in Serco's expectations or any change in events, conditions or circumstances on which any such statement is based after the date of this announcement, or to keep current any other information contained in this announcement.  Accordingly, undue reliance should not be placed on the forward-looking statements.