STOCKHOLM (Reuters) - Sweden’s Securitas (SECUb.ST) has agreed to buy the electronic security business of United States-based Diebold as it aims to strengthen its technology offer, sending its shares up 4 percent.
Securitas, whose core offer is manned guarding, is betting on high-tech surveillance - such as “smart cameras” which discover threats - for future growth, but said in February it would not reach a target to increase its share of technology-based contracts to 18 percent of group sales by year-end.
Handelsbanken analyst Staffan Aberg said the company’s share of technology-based contracts in the U.S. would be boosted to 13 percent with the Diebold deal, from a previous share of 2-3 percent.
Security solutions become more profitable when technology is included and would improve Securitas’ market position as smaller players would be less able to rival their offering, he added.
Securitas, whose biggest rival is British G4S (GFS.L), said the purchase price of $350 million was 11 times estimated EBITDA for 2015, adding the deal would boost group profit from 2016.
The acquired operations, the third largest commercial electronic security provider in North America, reached sales of 2.8 billion Swedish crowns ($325.5 million) in the July 2014-June 2015 period and has around 1,100 employees.
Securitas said it would take one-off costs for separating the e-security business from Diebold Incorporated and transaction costs of around 60 million crowns.
Securitas, which is present in more than 50 countries across the globe with the bulk of its business in Europe, said the acquisition was subject to regulatory approval, with closing expected during first quarter of 2016.
Last year, Securitas bought Belgian security and critical communications systems integrator SAIT, and 24 percent of the shares in the U.S. remote video services company Iverify.
Reporting by Helena Soderpalm and Olof Swahnberg; editing by Niklas Pollard