Securitas creates a world leader in cash handling services - acquires Loomis Fargo & Co. in the United States
Tuesday, May 15, 2001
Securitas has today acquired the remaining 51 percent of the shares in the cash handling company Loomis Fargo & Co. ("Loomis") in the U.S. The acquisition makes Securitas the second largest cash handling services provider in the U.S. and a world leader in cash handling services with annual sales of SEK 8.6 billion (USD 855) and with a market share of 18 percent in the U.S. and 16 percent in Europe.
The US market for cash handling services is estimated to be worth MSEK 22,200 (MUSD 2,200). Transport, growing at approximately 4 percent per year, accounts for the largest share, about 60 percent, of the total market. ATM related services is the fastest growing area, with about 10 percent annual growth. The market for cash processing services have just started to grow and more outsourcing here is expected. Loomis, with forecast annual sales of MSEK 4,200 (MUSD 415) is the second largest cash handling provider in the U.S. with a market share of 18 percent.
Loomis, based in Houston, Texas, has operations in 220 locations in the U.S. with 2,200 employees and 2,600 vehicles. Sales are evenly spread throughout the U.S. and the company is organized into 3 geographical divisions. Transport accounts for approximately 60 percent of sales, ATM related services for 30 percent and cash processing services for the remaining 10 percent. Through refinement and specialization, the company has steadily increased the operating margin from 4 percent in 1997 to 7 percent in April 2001 and has a full year forecast for 2001 of approximately 8 percent.
Through the acquisition, Securitas will create a world leader in cash handling services and a new, strong platform for further developing Cash Handling Services within the Group. The acquisition will also enable the transfer and exchange of experience and knowledge gained between Cash Handling Services in Europe and the U.S.
Initially, 49 percent of the shares in the company were acquired as part of the acquisition of Burns in the U.S. in September 2000. The purchase price for the remaining 51 percent of the shares will be MSEK 1,028 (MUSD 102). The total goodwill created in the acquisition, including the 49 percent of the shares already owned and goodwill in Loomis of MSEK 907 (MUSD 90), amounts to MSEK 2,772 (MUSD 270) and will be amortized over 20 years. Loomis will be fully consolidated in the Securitas Group from May 2001 and the acquisition will contribute positively to profit before tax and free cash flow from the acquisition date.
The transaction will double the sales of the Cash Handling Services business area in Securitas from SEK 4.3 billion to SEK 8.6 billion on a full year pro-forma basis. The full year operating income in the business area will increase by MSEK 355 pro-forma, corresponding to an operating margin of 9 percent.
The acquisition will contribute positively to income before taxes with approximately MSEK 40 on a full year pro-forma basis.
The acquisition gives Securitas the opportunity to exceed the five year vision for Cash Handling Services and supports the opportunity to achieve an increase of up to 30 percent in the Group´s income before taxes in 2001.