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A Delhi Security Company Makes $235-Million Acquisition In Australia

10 August, 2008

Indian security companies are ready to take on the world. In the largest overseas deal from the security industry in India, Delhi-based Security and Intelligence Services (SIS) has acquired the guarding and patrol business units of United Technologies Corp (UTC) in Australia. UTC, an American conglomerate, has divested its three arms – Chubb Security Personnel, Chubb Mobile Services and MSS Security Group, which together fetch revenues of $400 million a year. The deal would make SIS one of the largest manpower security firm in the Asia-Pacific region with consolidated revenues of around Rs 2,000 crore.

According to The Economic Times, which did not cite sources, the deal could be worth $235 million. The transaction will be funded by a mixture of debt, equity and internal accruals. Earlier this year, US-based hedge fund DE Shaw had bought 14 per cent stake in SIS for around Rs 300 crore ($75 million), valuing the company at about Rs 2,150 crore ($525 million). The report added that SIS is expected to raise funds from DE Shaw and SBI.

SIS was started by first-generation entrepreneur Ravindra Kishore Sinha (pictured) in 1974. He was a journalist priot to hid venture. Now the company offers a whole range of services from manned guarding of sites to secured transportation of cash, corporate investigation assignments to integration of electronic security gadgets. The company has a CAGR of 54 per cent per annum and customer retainership of 92 per cent. Some of the clients of SIS include Tata Steel, Tata Motors, ICICI, Idea Cellular and Future Group.

SIS is one of the three largest security companies in the country, with others being Topsgrup and Group 4 Securicor. Topsgroup became first Indian security firm to make an overseas acquisition when it acquired 51 per cent stake in British security firm, The Shield Guarding Company Ltd, for Rs 125 crore. It had received private equity funding from ICICI Venture, Indivision, the investment of arm of the Future Group, and Rakesh Jhunjhunwala. US-based Group 4 Securicor is a multi-national player in this segment with operations in more than 100 countries.

The $80 billion UTC group had put its non-electronic security business in Australia on the block last year. The company continues to offer electronic security solutions in Australia through other companies. UTC offers high-technology products and services to the building systems and aerospace industries. The businesses are split into six segments – Otis, Carrier, UTC Fire & Security (UTC F&S), Pratt & Whitney, Hamilton Sundstrand and Sikorsky.


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A Delhi Security Company Makes $235-Million Acquisition In Australia

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