Delhi security firm forays Down Under
Security and Intelligence Services, a Delhi-based private security firm, cquires the Australian guarding and mobile patrol services of US-based United Technologies Corp. Chubb Australia in a deal worth about $250 million.Updated: Aug 05, 2008 21:29 IST
Security and Intelligence Services, a Delhi-based private security firm, has acquired the Australian guarding and mobile patrol services of US-based United Technologies Corp. —Chubb Australia — in a deal worth about $250 million.
In winning the deal, the biggest takeover in the security agency space, SIS had outbid some of the world's leading security firms, said Rabindra Kishore Sinha, chairman and managing director of the company. Sinha didn't disclose the financial details, but a person familiar with the transaction put the acquisition price at about Rs 1,100 crore ($250 million).
The acquisition target, with 8,000 employees on its rolls, is a leading provider of security services in Australia. It was spun off from the parent company, United Technologies, two years ago as the latter wanted to focus on its core business. Chubb Australia had a turnover of $500 million last year.
“This acquisition will help us expand our footprint in Asia, where demand for private security is growing fast,” Sinha told Hindustan Times. “We want to be the market leader in Asia. We see opportunities in New Zealand, Thailand, Taiwan and mainland China.”
SIS currently employs 30,000 people and had a turnover of Rs 200 crore last year. The company's revenue has been growing 50 per cent or more annually over the past three years, Sinha said.
SIS planned to fund the acquisition through a combination of internal accruals, debt and equity. It is raising money from State Bank of India and private equity company DE Shaw, Sinha said.
SIS will continue with the Chubb brand for at least two years, Sinha said
The global market for guarding and mobile patrol services is estimated at $25 billion. Asia now accounts for only 20 per cent, but the market in the continent is growing much faster — 15 to 20 per cent annually — than in the United States and Europe, where demand for private security services has mostly peaked.