Diebold entered into an agreement Monday with Securitas to divest its North America-based electronic security business, including Diebold's full portfolio of intrusion, fire, video, access control and systems integration services, as well as monitoring, maintenance and other security-related services for commercial and financial markets. Revenue for this business was approximately $330 million from June 30, 2014 to June 30, 2015.
The deal is valued at approximately $350 million. Diebold is retaining all its physical and consumer transaction security businesses related to its core financial market, including automated teller machine security, anti-fraud card solutions, bank branch facility and drive-up systems and related services. Diebold Electronic Security will now operate as Securitas Electronic Security.
"Over the years, we grew the electronic security business organically into one of the leading providers in the North America commercial and financial markets through innovative software and services," Andy W. Mattes, Diebold president and chief executive officer said in a statement. "As a highly capable global leader in the security industry, Securitas has the scale and resources to take electronic security to the next level for our customers. We also look forward to continuing the relationship with Securitas to provide compelling expertise that further leverages our combined capabilities in services and security moving forward. This will enable a smooth transition for our customers and employees alike."
Diebold´s North American Electronic Security business, based in Green, Ohio, is the third-largest commercial electronic security provider in North America, with approximately 1,100 employees. The operation includes more than 55,000 monitored customer locations and 200,000 sites serviced. The two companies have also agreed to a strategic business alliance in which Securitas will serve as Diebold's preferred supplier for electronic security solutions in North America. This will help ensure a seamless transition for Diebold's electronic security customers, as well as drive further security innovation and services for the industries in which both companies operate.
Tony Byerly, who has led Diebold's global electronic security business for the past three and a half years, will continue to lead the electronic security business as President and report to Santiago Galaz, Divisional President of Securitas Security Services North America. "We welcome Tony and his entire team to Securitas," Galaz said in a statement. "With this acquisition, we will have the ability to increase our security solutions sales, while also being an active player in the technology market, which will bring added value to our customers and make our offer much stronger. We also believe that we can leverage Diebold's electronic security expertise to Securitas' existing customer base and offer our customers possibilities of protective services by optimizing the equation between different service components."
Securitas' worldwide strategy is to increase security solutions and technology as a part of the offering. Over the past four years, Securitas has supported its global strategy by making substantial investments in organically building strong competences, as well as key acquisitions. In 2014, Securitas acquired the Belgian security and critical communications systems integrator SAIT, and 24 percent of the shares in the US remote video services company Iverify. The acquisition of Diebold's Electronic Security business in North America will strengthen this corporate strategy.
Ten percent of the $350 million purchase price is contingent on successful transference of certain customer relationships to Securitas. Diebold will provide transitional services to Securitas during the closing phase of the agreement to help ensure a smooth integration. The sale is subject to regulatory approvals, customary closing conditions and working capital adjustments, and is expected to be completed during the first quarter 2016.
