Swedish FDI:

Securitas doubles sales in South Africa through acquistion in Western Cape

subscriber | 12 October, 2011

Securitas has acquired another South African security
services company, Orbis Security Solutions (Pty) Ltd, for SEK 35 million (ZAR 42 million) the company has announced.

The acquisition follows the company's acquisition strategy in South Africa, which started 2 years ago with low key purchases of relatively small private players, first, MKB Tactical in Johannesburg, then Claw Protection Services (Johannesburg) and, last December,  Piranha Security (Johannesburg/Pretoria).

Securitas, the largest industrial guard company in the world by employees, states the new South African subsidiary has SEK 76 million (ZAR
90 million) in sales and about 1,500 employees.

This would suggest that Securitas consolidated sales in South Africa, as per A-Scan's calculations
based on information given at the time of the purchase of previous
companies and without calculating further organic growth, stands at about SEK 160 million.

Orbis operates in the Western Cape Province and therefore complements last years purchase in Johannesburg geographically.

"With this
acquisition, Securitas in South Africa has approximately 3,000 employees,
with operations in guarding, mobile, alarm monitoring, technology,
forensics and risk management services", the company states in a press statement.

Securitas still has a long way to go in catching up with global and domestic competitors in South Africa. It states however that the acquistion means that it now is one of
the top 3 security services companies in the Western Cape region. However in the country's main economic center, Johannesburg/Pretoria (the Gauteng province),  A-scan's assessment is that Securitas has a long way to go.

The purchase price for Orbis is 25 % lower, based on price per employee, than the most recent acquisition, which suggests that the company may have got it right on that score.

To continue to catch up with leading competitors - Tyco International (ADT), Chubbs and G4S are all quite a bit larger than Securitas in South Africa - Securitas would have to continue its acquisition strategy in South Africa. It is not the company's philosophy to be a small player anywhere.

There are a few incentives for Securitas to proceed in South Africa, the main perhaps being to be able to have a global foot print and therefore aim to become the private guard company of choice not only for North American and European multinationals but also for emerging market multinationals, international organisations, national key point installations and embassies.

The private guard and security market in South Africa has its own attraction too. It is a fast growing one, not the least as South Africa due inefficient policing and vast income disparities invites to organised as well as petty crime.

The country partially unfairly suffers from a common global perception  that murder, robbery and rape is commonplace - a perception that briefly improved after last years vastly successful hosting of the Fifa World Cup.

Africascan comment

You need to be a subscriber to view this section. Click here to proceed to the shop. If you are a subscriber already please login to the right.