Ontario Teachers' Pension Plan is teaming up with the family behind Lego toys to invest €500-million ($609-million) for a quarter of ISS, a Danish outsourcing group.
The Canadian pension fund and Kirkbi Invest, a holding company that invests on behalf of the Kirk Kristiansen Family, said Thursday the investment will give them a 26 per cent stake in the company, which is trying to reduce its debt ahead of a planned initial public offering.
ISS, founded in 1901 in Copenhagen, helps companies manage their facilities, including cleaning, catering and security.
Teachers — which invests the pension fund’s assets and administers the pensions of 300,000 active and retired teachers in Ontario — will provide $426.5-million, most of the investment.
Jo Taylor, vice-president of Teachers’ Private Capital, said the fund sees excellent opportunities for ISS to continue to increase revenue as it is “well placed to capture new customers.”
“Management is experienced, with deep industry knowledge and has put the company on the right strategic path. We look forward to helping ISS expand successfully in both developed and emerging markets, and to introduce the executive team to the Teachers international network.”
ISS expects to use the money from the investment to reduce debt.
The company’s private equity owners, EQT Partners and GS Capital Partners, are not selling any shares and will remain majority owners.
Ole Andersen, chairman of ISS, said the board is happy to welcome the “respected and successful long-term investors” to ISS.
“Together with our two majority owners, the board will work closely with the new investors on ISS’ value creation. ISS is on track to significantly deleverage ahead of an IPO within a few years.”
ISS booked revenue of nearly $13-billion last year and has some 530,000 global employees in more than 50 countries. The company recently won major new contracts with Barclays Bank and Novartis.