SIS Cash logistics firm SIS Prosegur has acquired the cash management business of Danish major ISS for about Rs 150 crore, according to two people aware of the development. The acquisition, which is likely to be announced over the next few days, is the latest example of transactions taking place in the Rs 35,000 crore, yet highly fractured, private security services sector in India. SIS Prosegur is a JV between Security and Intelligence Services (India), one of the countrys largest private security services providers, and Spains Prosegur, the worlds second largest cash management company. The joint venture was formed in 2012. An email sent to Rituraj Sinha, chief operating officer at SIS, did not elicit any response till the time of going to press. ET was the first to report in August that a number of bulge bracket private equity buyout funds, a list that includes Baring Asia, Advent, Apollo Management, Bain Capital, Carlyle and Apax Partners, were eyeing Blackstone Groups CMS Info Systems, the countrys largest cash management services company. The acquisition positions SIS Prosegur as the countrys second largest cash management operator, with a market share of almost 30 per cent. It will see ISS, the worlds largest facility management services provider, divest a non-core asset, while continuing to focus on its core business. The cash management services sector includes replenishment of ATMs, doorstep banking, transportation of bullion, cash in transit and cash processing services to banks, public utilities and retailers. The segment has grown at an estimated rate of 25 per cent annually over the last few years. Other major players include Brinks and Writer Safeguards. SIS Prosegur operates in 320 cities across the country. Post transaction, it will have 27,000 ATMs under management and is expected to have annualised revenue of about Rs 450 crore. Last year, Ajay Relan-led CX Partners bought a 20 per cent stake in the company for Rs 550 crore, making it one of the biggest private equity transactions in the countrys private security services sector. According to experts, the rising interest in the industry, which is broadly divided into segments ranging from manpower and guarding to cash logistics and electronic security, is based on expectations that its size will surpass Rs 40,000 crore by fiscal 2016.
Posted on: Tue, 09 Sep 2014 14:27:24 +0000
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