New Delhi: Leading private equity firm CX Partners will invest Rs 500 crore in the country's largest private security firm SIS India -- making it the biggest ever PE deal in this space. (Agencies)
Security and Intelligence Services (India) Ltd (SIS) will use part of these funds for providing an exit to one of its existing investors, global fund DE shaw, and the rest would be used by the company to fund its future growth opportunities.
As a part of the deal, Theano Private Ltd, a subsidiary of CX Partners, would subscribe to a combination of equity and compulsory convertible debentures (CCDs) to the extent of 14.72 percent stake in the company.
Besides, it will also purchase the stake held by DE Shaw, who has been invested in SIS since early 2008. SIS had raised funds from DE Shaw at that time to facilitate its earlier acquisition of Chubb Security, an Australian guarding and mobile patrol business unit of the United Technologies Corp.
Chubb is Australia's market leader in manpower security business with revenues of over Australian dollar 350 million (over Rs 2,000 crore).
When contacted, SIS Group Enterprises' Group Chief Operating Officer Rituraj Sinha said: "SIS Group has clearly capitalised on the growth opportunity that the security and business support services segments offered over the last few years. Our revenues have grown 10 times in the last 5 years."
However, he did not comment on the details of the deal.
SIS was founded by first-generation entrepreneur Ravindra Kishore Sinha in 1974 and is the largest private security services firm of the country with expertise in man guarding, electronic security, cash management services, security training and consulting, among others.
In last financial year 2011-12, it reported revenue of Rs 2,449 crore and has an employee strength of close to 60,000 people across India and Australia. It serves over 3000 corporate customers, including some large business houses and banks, among others.
SIS has been on an aggressive expansion drive in the recent past and last year entered into a joint venture with Prosegur, world's second largest security and cash management company by market capitalisation. This venture offers secured cash transportation and ATM management solutions to banks and retail establishments.
Private security industry in India is estimated to be worth about Rs 15,000 crore in size and is estimated to grow at 15-20 percent over the next few years.
Demand for private security guards, electronic security and secured cash transportation has seen tremendous growth over the last decade. Other major players in the sector include G4S, BIS, TOPSGRUP and Checkmate.
New Delhi: Leading private equity firm CX Partners will invest Rs 500 crore in the country's largest private security firm SIS India -- making it the biggest ever PE deal in this space.