SoftBank in early talks to buy Allied Universal

The deal, if completed, could value the business around $18 billion.

SoftBank Group is in early-stage talks to acquire Allied Universal from its private-equity backers, according to people familiar with the matter, in what would be the Japanese technology conglomerate’s latest bet on widespread adoption of artificial intelligence and robotics in the workplace.

Masayoshi Son, SoftBank’s chief executive.

A deal is far from certain, but if completed, it could value Allied at as much as $18 billion, excluding the security company’s debt, one of the people said. The company is backed by U.S.-based buyout firm Warburg Pincus and Canadian pension fund La Caisse.

Bloomberg earlier reported the deal talks.

In recent years, SoftBank has pivoted from its earlier strategy of betting on a mix of startups to going all in on AI. That includes a $64 billion investment in OpenAI, plans for a fleet of data centers, its chip company Arm and robotics.

Last year, SoftBank, which is headed by Japanese billionaire Masayoshi Son, struck a $5.4 billion deal for the industrial robotics-focused business of Swiss engineering giant ABB in a bid to combine the potential of AI with robots.

Allied is one of the world’s largest private-security firms. Its operations span more than 100 countries and territories, providing both armed and unarmed security guards as well as different types of security technology across industries. The U.S.-based company generates about $23 billion in annual revenue, according to its website

SoftBank’s current focus on AI doesn’t make its interest in a private-security company immediately obvious. However, Allied is making AI-related technology a key part of its offering.

One of Allied’s AI-powered tools offers users real-time data collection, as well as incident and GPS tracking that the company claims increases safety and reduces liability exposure for customers.

Warburg, which oversees more than $110 billion in assets, first invested in a predecessor company of Allied called Universal Services of America in 2015. The next year, it merged with another U.S. rival, AlliedBarton Security Services. In 2019, La Caisse acquired an undisclosed stake in the newly created company, Allied Universal. That deal valued the business at more than $7 billion.

Allied Universal then expanded internationally in 2021 by acquiring the U.K.’s G4S for about £3.8 billion, equivalent to about $5.1 billion in today’s dollars.

That suggests that Allied’s two key backers stand to generate a substantial gain if the business is sold to SoftBank at $18 billion.

Write to Ben Dummett at ben.dummett@wsj.com