Securicor puts aside £120m for acquisitions

Securicor has budgeted up to GB£120m ($202m) for acquisitions in an effort to become one of the world’s three largest security services groups.

Nick Buckles, chief executive, said that if United Technologies, the US industrial group that acquired Chubb in June, decided to put any of the security services company’s businesses up for sale, Securicor would be keen to bid.

“We believe in further consolidation within the industry and if UTC were to sell off Chubb’s manned guarding businesses, it is highly likely we would be interested.”

Mr Buckles would not specify which elements of the business were particularly attractive for fear of sparking a bidding war. Securicor, moreover, would not confirm whether it had signalled its interest to UTC.

Securicor expects to have up to £120m to spend by its financial year-end on September 30, as it has cut debt and profited from the disposals of non-core assets.

It recently sold its parcels and IT consultancy business to focus on security services. But a downturn in volumes in its cash services division and increased competition in its guarding business forced it to issue a profit warning in May.

Mr Buckles believed he could turn around the group by building a strong share in individual markets. “We plan to get the performance back on track and improve the share price, and then we hope to be in a position to lead further consolidation within the industry.”

The group was unlikely to pay more than £10m-£20m for each transaction unless it was a “transformation deal”.

Analysts valued Chubb’s manned guarding business, which employs 27,000 security guards, at about £50m, a figure which would probably also attract the attentions of the leading players – Securitas and Group 4 Falck. Andrew Ripper, at Merrill Lynch, said: “There is no guarantee UTC will sell off the guarding business.”

He said UTC was more interested in Chubb’s physical assets but had given no indication it would dispose of any parts of the business.