Security services co Topsgrup close to a buy in south India, may see secondary PE deal

Mumbai-based security solutions provider Topsgrup is close to striking a deal in south India to buy a firm engaged in man-guarding services. The target provides its services to manufacturing including textiles and infrastructure companies, according to a top company executive.

Parallely, Topsgrup is also likely to see a private equity transaction which could translate into a part or full exit from certain existing financial investors.

While separate media reports said Topsgrup is raising a new round of private equity funding, Ramesh Iyer, vice chairman and CEO of Topsgrup told VCCircle the company is not looking to raise money. This means the proposed PE deal would be secondary transaction.

The proposed deal is expected to be in the range of around Rs 150 crore (nearly $23.6 million) by mid-2015, separate media reports said early this week.

Tops Security Ltd, the flagship of Topsgrup, is backed by ICICI Venture, Everstone Capital and private investor Rakesh Jhunjhunwala.

It is not clear if all of the investors are looking at a part-exit in the proposed transaction. Jhunjhunwala had backed the firm over nine years ago while ICICI Venture and Everstone came in during 2007, partly through a buyout of previous investor Volrado's stake.

Meanwhile, it is looking to seal its first inorganic expansion move in over six years. In 2008 it had acquired majority stake in UK's The Shield Guarding Co Ltd. In 2012 it bought out the remaining stake in the overseas firm.

In the same year it had acquired Bangalore-based Guardwell Detective Services Pvt. Ltd. This had strengthened its presence in south India.

The new deal is expected to make it the top player in the region. It is targeting the companies engaged in guarding services and security technology.

The security solutions provider has also charted a wider expansion plan spanning both organic and acquisition-led growth for the next five years and is currently in the process of consolidating its business in India and UK market before it ventures into other countries.

“Each year we will be acquiring firms for around Rs 100 crore for the next five years,” Iyer said.

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