Cash management services provider SIS Prosegur has closed a transaction to acquire Danish major ISS’ cash management business in India. Sector estimates peg the deal at Rs 150-180 crore.
This deal will make SIS Prosegur the second-largest operator in cash management services with a 28 per cent market share. After closing, the consolidated entity will have annualised revenues of Rs 450 crore, 27,000 ATMs under management and a fleet of 2,500 cash vans.
Through this deal, SIS Prosegur will become market leader in the east and south India markets. Currently, the company ranks third in the sector, behind CMS and Brinks.
On the other hand, it allows ISS to divest a non-core, cash management services asset and focus on its core business of facility management. The deal also triggers consolidation in the sector.
Commenting on the deal, Rituraj Sinha, promoter of SIS Group, said: “As a strategic player, SIS Prosegur is committed to consolidating cash management services in India. Our goal is to hold 40 per cent market share by 2016 and we shall pursue both organic and inorganic opportunities aggressively.”
Cash management is a sub-segment of the private security sector, estimated to be worth Rs 35,000 crore revenue by a recent Ernst&Young-Federation of Indian Chambers of Commerce and Industry report on it. The cash management services sector offers ATM replenishment, door-step banking, bullion transport, cash in transit and cash processing services to banks, organised retailers and public utilities.
The sector has been growing at 25 per cent annually for the past few years. The thrust on inclusive banking has proved to be a boon for the sector, with rapid expansion of the ATM network (white label, brown label) and a focus on rural branch banking network.
ISS’ cash services business was established under the previous ownership of SDB Cisco, in the late 1990s.
SDB Cisco was a joint venture between the SPIC (Muthiah) group and Certis Singapore. ISS acquired SDB Cisco in 2010 and has been evaluating divestment of the cash management services business for some time.
ISS is the world’s largest facility management company with revenues of $10 billion, 500,000 workers and footprint across 100 countries.
SIS Prosegur is an Indo-Spanish joint venture launched in 2012 between the SIS Group and Prosegur. SIS Group is India’s largest private security services firm with revenues of Rs 3,410 crore in 2014.
