PE-backed Topsgrup completes acquisition of UK security services firm for $30.36M

Mumbai-based security solutions provider Topsgrup has acquired the balance 49 per cent stake it did not own in Shield Guarding Co. Ltd (SGCL) for £19.5 million ($30.36 million or Rs 168 crore).

Topsgrup had acquired a majority stake of 51 per cent in the firm in May 2008 for Rs 125 crore (£15.4 million or $30 million back then).

The management team is retained even after the complete acquisition, with Stuart Kedward assuming the role of managing director. He has been with SGCL for the last 15 years.

“It is a strategic decision on our part to tie up with one of the UK’s leading security firms,” said Diwan Rahul Nanda, global chairman of Topsgrup.

Founded in 1987, SGCL caters to several sectors including banking, insurance, technology, legal & professional, natural resources, utility, public sector, retail, healthcare, property management, logistics, media & publishing, fine arts, and leisure & conference. Its services include manned guarding, remote monitoring, reception security, shopping centre management, concierge, mail room, mobile response, patrol and key holding, alarm response, courier and covert security.

SGCL, promoted by Gerald Paxton, recorded a turnover of $ 121 million (Rs 484 crore) with profit before tax of $ 4.5 million (Rs 18 crore) for 2007-08. It was projected to hit revenues in excess of $140 million (Rs 560 crore) in 2008-09 when Topsgrup acquired a majority stake in the firm.

At that time, the deal valued SGCL at over 13x its trailing PBT.

Topsgrup is into manned guarding, cash management, electronic & intelligence security, facility management and emergency response services. It had received private equity funding from Indivision I (now under Everstone Capital) and ICICI Venture, and also counted among its previous investors Volrado Venture Partners, who exited by selling its stake to Indivision.

In 2007, ICICI Venture invested Rs 115 crore for 13.69 per cent equity stake while Indivision increased its holding in the company from 4.94 per cent to 7.08 per cent with an additional investment of Rs 25 crore ($6 million) – taking its total exposure in Topsgrup to Rs 57 crore. Ace market investor Rakesh Jhunjhunwala’s Rare Enterprises is also an early private investor in Topsgrup.

Soon after it raised PE funding in 2007, Topsgrup acquired Guardwell Detective Services Pvt Ltd for $5 million four years ago.

Another PE-funded security services firm in India is SIS, which counts among its investors DE Shaw and has recently got commitment from CX Partners for a large round of PE funding.

(Edited by Sanghamitra Mandal)

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