Securitas, the global security services business comprising guarding, electronic security, fire and life safety solutions, has announced a "transformative acquisition" of Stanley Security, the electronic security solutions business of Stanley Black & Decker, making this their largest acquisition to date.
Stanley Security is a provider of electronic security solutions with operations in 12 markets globally and with approximately 7,800 employees operating through approximately 200 locations and 16 monitoring centres. The acquisition transaction includes the Commercial Electronic Security and Healthcare Security business lines, where Stanley Security is said to have deep expertise and an extensive innovation pipeline, but excludes Stanley Access Technologies, the door automation business.
The business is expected to generate sales of nearly $1.7 billion in 2021, of which around 40% is recurring revenue and an adjusted EBITDA margin of close to 12%. The cash purchase price of $3.2 billion on a debt and cash free basis represents a multiple of approximately 13x Stanley Security’s estimated adjusted EBITDA 2021 including cost synergies of approx. $50 million, before commercial synergies and strategic benefits.
Based on Securitas’ last 12 months and Stanley Security’s estimated 2021 sales, annual sales from the combined electronic security and solutions portfolio is estimated at $4.2 billion, out of which $3 billion is electronic security.
Securitas has in fact been acquiring numerous electric security companies in the past 8 years. Having acquired Stanley Security’s electronic business in five countries – Germany, Portugal, Switzerland, Singapore and India – in September 2020, Securitas had already augmented its capabilities and established their first electronic security presence in Singapore and India last year. Total sales of the in-scope business amounted to $85 million in 2019, mainly driven from installation sales, recurring monthly revenue and maintenance services. Other significant acquisitions in the last 2 years include:
- Protection One, the German market leader specializing in remote technology-driven security solutions and electronic security, with around $37 million sales in 2020.
- FE Moran Security Solutions, a top 30 alarm monitoring and electronic security systems integration company in the U.S., with $53 million in sales.
- Techco Security a Spanish provider of integrated security services including installation, maintenance and remote guarding services as well as access control, electronic alarm surveillance and fire protection, and supports clients through two operations centres in Madrid and Barcelona. 2018 annual sales were around $56 million.
Stanley Black & Decker reported that it was divesting these two business lines to allow them to sharpen their strategic focus on their core businesses, which are power tools and storage, industrial fastening solutions and pipeline services. In 2020, the Commercial Electronic Security business reported $1.4 billion sales, proving to be a resilient segment in a downturn, limiting its organic decline to 4% compared with the previous year. Their revenue mix consisted of 57% related to installation, 39% recurring revenue and 4% product sales.
The Healthcare security business achieved around $150 million in revenues, with technology offerings including RTLS, asset tracking, infant protection, wander management, fall management and emergency call products across hospital, senior living and home automation markets.
With this acquisition, Securitas migrates away from staff-intensive guarding and ranks as one of the top 3 leaders in the global commercial electronic security market.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.