Acquisition of Instalarme, Brazil
G4S, the world’s leading international security solutions group, announces its entrance into the Brazilian security market with the acquisition of SSE Do Brasil Ltda, the parent company of Instalarme Soluções Eletrônica Ltda (“Instalarme”), from Instalarme (Cayman) Limited, a subsidiary of the private equity company Axxon Group, for an initial cash consideration of £17.1million on an enterprise value basis and a further cash consideration of up to £6.4million subject to the achievement of an EBIT target for 2010.
Brazil is the fifth largest security market in the world with excellent growth prospects, helped by its vast natural resources including significant oil and gas discoveries and the expectation of significant one-off boosts from the football World Cup in 2014 and the Olympic Games in 2016. The acquisition of Instalarme marks an important step in G4S’ strategic development and significantly increases its footprint in the Latin American region.
Instalarme is an electronic software and hardware integration company, the market leader in the country’s banking sector and counts all of Brazil’s largest banks among its clients. It is the largest company in the Brazilian security technology sector with 2009 revenue of £15.9million.
The business, founded in 1975 and acquired by the Axxon Group in 2001, has around 13,600 alarm connections - 11,300 in the banking sector and 2,300 in the corporate and residential markets - and provides:
- Integration of Electronic System Solutions;
- Software and Hardware sales, installation and maintenance services; and
- Security monitoring services
More than 75% of Instalarme’s sales are recurring and generated from long-term service agreements usually lasting three years.
G4S CEO Nick Buckles said: "Instalarme represents an excellent opportunity to enter the substantial and growing Brazilian security market and immediately establish our pedigree in the country. The geographical coverage of the business, together with its capabilities in complex systems integration and project management, plays to the strengths of the G4S solutions strategy and gives us a strong platform from which to maximise the long term potential of the Brazilian security market."
Instalarme, based in Araras, has 365 employees and is the only nationwide security systems company in Brazil, with headquarters in São Paulo, six operational branches (Araras, Porto Alegre, Florianópolis, Curitiba, Salvador and Recife) and two monitoring centres (São Paulo and Porto Alegre).