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October 28, 2013

Deal Book. G4S is one of the largest private security firms in the world. It has over 620,000 employees and revenues of (only) about $12 billion per year for all that effort. Yet, undoubtedly, the world would stop if we were not able to move our cash from place to place or prevent ourselves from being mobbed or pillaged by our fans or enemies. That’s just the way the world works, Greenpeace notwithstanding, and things work better, for better or worse, if we know the rules.

G4S Cash Solutions Courtesy: G4S PLC

G4S Cash Solutions
Courtesy: G4S PLC

As an investment, it’s so-so. Please see Exhibit 1 below.

The company will pay a dividend of $140 million to its shareholders this year for a current yield of 2.4% but our estimate of the volatility in the stock price is minus ($2.50) per share and the ride is bumpy. We need to be prepared with a stop/loss in place or make some extra expenditures on an options programme to protect our dividend because the stock price is beyond protection – it’s $20 and that’s that and as an unsponsored over-the-counter ADR, it’s expensive to buy and sell the stock which means that if we buy it, it’s just ours no matter what.

Is This The Capital Market? Courtesy: Fizzy Jinks

Is This The Capital Market?
Courtesy: Fizzy Jinks

But that’s not what caught our attention this morning. The vaunted hedge fund and buy-out specialists, Charterhouse Capital Partners, has offered to eviserate G4S with an offer of $2.5 billion to buy out the core of its business, Cash Solutions, which moves our money from here to there (Reuters, October 28, 2013, Embattled G4S rejects $2.5 billion offer for cash delivery unit).

Creative, no?

Exhibit 1: (B)(N) G4S PLC Unsponsored ADR (NYC OTC) – Risk Price Chart



G4S PLC, together with its subsidiaries, provides secure solutions and cash solutions as well as undertakes other outsourced business processes in sectors where security and safety risks are considered a strategic threat.

(Please Click on the Chart to make it larger if required.)

From the Company: G4S plc, together with its subsidiaries, provides various security solutions in the United Kingdom, Ireland, Continental Europe, North America, the Middle East, the Gulf States, Latin America, the Caribbean, Africa, and the Asia Pacific. It operates in two segments, Secure Solutions and Cash Solutions. The Secure Solutions segment offers integrated security solutions for commercial organizations, such as risk consulting, manned security, and security systems; and the protection of critical national infrastructure, care and justice, integrated facilities, and border protection services for governments. The Cash solutions segment engages in the outsourcing of cash cycle management for central banks, financial institutions, and retailers, which comprise cash transportation; cash centers designing, building, and management; counting and reconciling cash; fitness sorting of notes for use in ATM machines; counterfeit detection and removal; and redistribution of cash to bank branches, ATMs, and retail customers. This segment also provides cash consulting services on cash management strategy, bank note production and security, and various aspects of cash cycle efficiency; ATM management services, including cash forecasting, cash transportation and reconciliation, first-line maintenance, and ATM engineering services; retail cash management services; and secure international transportation and insurance of currency, gems, precious metals, and other valuables. It serves various sectors, including government, private energy and utilities, oil and gas, transportation and logistics, ports and airports, leisure and tourism, financial institutions, mining, corporate and industrial, and retail. G4S plc was founded in 1901, has 620,000 employees and is headquartered in Crawley, the United Kingdom.

For more information on the Chart Elements, please see our recent Post, The RiskWerk Company Glossary.

The RiskWerk CompanyAnd for more creative solutions to risk averse investing and what it has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100.


We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to


Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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