Update: On Feb. 1, 2016, Diebold Inc. announced it has completed the previously disclosed agreement to sell its North America-based electronic security
business to Securitas AB.
The acquired business will operate under the company name Securitas, with the brand transition from Diebold planned to be complete by the end of 2016. The companies also agreed to a strategic business alliance in which Securitas will serve as Diebold's preferred supplier for electronic security solutions in North America, and Diebold will be Securitas’ preferred provider of ATM-related solutions and services.
In addition, as part of the transaction Diebold and Securitas have entered into a transition services agreement (TSA) to ensure a seamless customer experience. Effective immediately, the TSA period is 12 months and provides Securitas the ability to leverage existing Diebold services, systems and physical assets to fully support its customers during the transition.
“We are pleased to finalize the divestiture of our North America electronic security business, marking an important milestone in Diebold’s transformation and allowing us to better focus our efforts and resources,” said Andy W. Mattes, Diebold president and CEO. “After having many customer meetings together with Securitas in recent weeks, we are very excited about what the future holds for our companies. I want to thank all 1,100 employees of Diebold Electronic Security and its leadership team for their continued dedication and commitment to our customers. This is also an important component of the financing for our pending business combination with Wincor Nixdorf.”
Securitas AB, an $8 billion Stockholm-based global provider of security services and solutions, has agreed to acquire the commercial contracts and operational assets of SDM 100 No. 7-ranked Diebold Incorporated’s Electronic Security business in North America, and will operate as Securitas Electronic Security Inc.
Securitas agreed to a purchase price of $350 million, with 10 percent of the price contingent on successful transference of certain customer relationships to Securitas. 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.
Diebold’s North American Electronic Security business, based in Green, Ohio, is the third largest commercial electronic security provider in North America. It is a provider of comprehensive electronic security solutions and services to business customers, delivering a full spectrum of capabilities including design, build, integration, installation, monitoring and service. The monitoring services include intrusion alarms, fire alarms and sprinklers, and monitoring of elevators. Diebold’s North American Electronic Security business has approximately 1,100 employees, more than 55,000 monitored customer locations and 200,000 sites serviced. 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.
To support its global strategy, in addition to making substantial investments in organically building strong competences, Securitas has made several acquisitions over the past four years. In 2014, Securitas acquired the Belgian security and critical communications systems integrator SAIT, and 24 percent of the shares in the U.S. remote video services company Iverify. The acquisition of Diebold’s Electronic Security business in North America will strengthen this corporate strategy, according to a press release from Securitas.
Securitas will serve as Diebold’s preferred supplier for electronic security solutions, helping to ensure a seamless transition for Diebold’s electronic security customers, as well as driving further security innovation and services for the industries in which both companies operate.
Alf Goransson, president and CEO, Securitas AB, said that this acquisition supports Securitas’ global strategy and strengthens Securitas’ position as the global knowledge leader in security solutions and technology.
“During the past years, we have focused on strengthening our technological expertise and come far to become the leading security solutions company. Securitas is at the forefront of the transformation of the security industry and we receive proof of this every day, in our interaction with existing and potential customers. With the acquisition of Diebold’s North American Electronic Security business, we will be able to further accelerate our development,” said Goransson.
“Over the years, we have organically grown our electronic security business to become a leading provider of broad, innovative solutions — leveraging our industry-leading software and services — in the commercial and financial markets throughout the United States and Canada,” said Andy W. Mattes, president and CEO, Diebold Incorporated. “As a highly capable global leader in the security industry, Securitas has the scale and resources to take this business to the next level for its customers. We also look forward to continuing the relationship with Securitas as our preferred provider of electronic security to provide compelling expertise that further leverages our combined capabilities in services and security moving forward. This will enable a smooth transition for customers and employees alike. Given the transformation that is occurring in the banking industry, this strategic decision will enable us to accelerate our own transformation and focus on the exciting opportunities we’re seeing for growth and innovation in that market.”
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, Securitas Security Services North America.
“We welcome Tony and his entire team to Securitas,” said Galaz. “Securitas Electronic Security — previously Diebold Electronic Security — will continue to be a leader in the North American electronic security industry. 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.”
The financing of the acquisition of Diebold’s North American electronic security business is in place in the existing Revolving Credit Facility. The one-off costs for separating the Diebold Electronic Security operation from Diebold Incorporated together with the transaction costs will amount to approximately $7 million and will be recognized in 2016.
Diebold will provide transitional services to Securitas during the closing phase of the agreement to help ensure a smooth integration. Diebold’s advisors for the transaction were Bank of America Merrill Lynch and Jones Day. Securitas was advised by K&L Gates.
The acquisition is subject to regulatory approval. Closing of the acquisition is expected during first quarter of 2016, from which point it will be consolidated in Securitas.