Private security company SIS Security Services will soon offload 10% stake for around R500 crore. Top contenders are global private equity (PE) and hedge fund firm DE Shaw, which is already invested in the company, and PE major JP Morgan. The deal may rank as the biggest in the private security field.
When contacted, SIS Security Services COO Rituraj Sinha refused to divulge details of PE players who may be the main contenders for taking up the stake but said that the deal would be announced soon. He added, ?The funds will be primarily used to acquire companies in India, Middle East and Southeast Asia.?
DE Shaw & Co already has a 14% stake in the company, having bought into SIS in 2008. The funds it brought in were used to acquire security company Chubb Australia.
Currently, the promoter ? the Sinha family ? holds 85% in the company. Following the stake sale, their holding will come down to 75%.
The private security market in India is estimated at R11,000 crore and is expected to grow by 20-25% in the next five years, which provides ample scope for companies like SIS Securities to scale up their operations.
SIS India is a provider of services ranging from manned guarding of sites to secured transportation of cash, corporate investigation assignments and integration of electronic security gadgets. Some of the firm?s customers are major industry players such as Tata Steel, Tata Motors, ICICI Bank, Idea Cellular and Future Group. SIS Security has a revenue of R1,440 crore in 2009-10 and the company targets to take that figure to R2,200 by 2012.
Over the past few years, the private security industry has been a favourite of private equity funds globally and is viewed as a sector with a high degree of sustainability.
