Sweden's EQT begins $3 billion alarm firm sale: sources

STOCKHOLM/LONDON Wed Apr 20, 2011 12:05pm EDT

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STOCKHOLM/LONDON (Reuters) - EQT, the private equity firm backed by Sweden's Wallenberg family, has begun the $3 billion-plus sale of burglar alarm firm Securitas Direct, people familiar with the matter said.

Securitas Direct could interest both rival private equity investors and large listed companies with security operations, including Stanley Black & Decker Inc, Tyco and United Technologies Corp (UTC), some of the people said.

Bidders are now receiving information memorandums on the business and must submit indicative bids next month, the people said. EQT hopes the business could as much as 20 billion Swedish crowns ($3.3 billion), or more, two of the people added.

The auction comes three years after EQT acquired Securitas Direct, which claims a fifth of Europe's monitored alarm market, selling security systems to homes and businesses in nine European countries. The potential sale was reported by the Wall Street Journal in March.

The business achieved earnings before interest, tax, depreciation and amortization (EBITDA) of 1.32 billion crowns in 2009 on revenue of 5.49 billion.

EQT took Securitas Direct private in 2008 for 10.1 billion Swedish crowns, two years after the unit was demerged from parent Securitas AB, the world's second-biggest security services firm.

Securitas Direct and Tyco declined to comment. EQT, Stanley and UTC did not immediately respond to requests for comment.

While Tyco's ADT business is already a heavyweight in the alarm industry, Tyco's management may be too preoccupied dealing with a potential bid from France's Schneider Electric to focus on sizeable external deals.

Schneider is serious about buying Tyco, people familiar with the matter said last week, even after media reports of a $30 billion preliminary bid prompted the French company to say it was "not currently" in talks with Tyco.

BUYOUT BIDDERS

EQT, which last month sold its German cable operator Kabel Baden Wuerttemberg to Liberty Global Inc, is among Europe's biggest private equity firms. It raised $12.6 billion of funds over the last decade, Preqin data show -- more than any other European buyout house outside Britain.

Private-equity bidders for Securitas Direct could include several of the deep-pocketed buyout houses that last year considered buying Denmark's ISS, one of the world's biggest facility services providers.

Three bid teams -- Blackstone Group, Bain Capital, Nordic Capital and Clayton Dubilier & Rice; CVC and Apollo Management; and Apax -- worked on bids for ISS, people familiar with the matter said then.

ISS held exclusive talks with Apax before opting for a flotation which it pulled in March, blaming volatile markets.

($1=6.128 Swedish Crown)

(Reporting by Quentin Webb in London and Sven Nordenstam in Stockholm; additional reporting by Nick Zieminski in New York; Editing by Douwe Miedema and David Holmes)

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