Strategic outsourcing company CSG Holdings, through its wholly owned subsidiary, Invictus Risk, will purchase the armed response and monitoring division of Stallion Reaction as a going concern for about R57-million.
The transaction includes individual client and commercial contracts, the armed response services provided on an outsourced basis on behalf of two other security companies and specific assets and employees, but excludes the domestic guarding and closed-circuit television monitoring divisions.
CSG CEO Pieter Dry said on Monday that this acquisition would ensure CSG became a “prominent” medium-sized armed response service provider in South Africa. He elaborated that the deal was in alignment with the company’s strategy to expand the basket of services offered by its facilities management division and complemented other recent acquisitions that CSG had concluded in the security industry.
Dry stated that various synergies and cost savings would be unlocked through the combination of Stallion with that of its other subsidiary 7 Arrows, which was bought over by CGS earlier this year. “Given our existing operating platform in the security industry, it is expected that the transaction will provide the platform for the further organic growth in the security industry,” he commented.
The transaction is subject to the fulfilment of conditions precedent including the satisfactory results of a due diligence investigation, all regulatory approvals and approval by CSG’s board.
CSG’s other security businesses, which currently cover the Lowveld and Gauteng, have more than 40 years’ experience in the private security industry. Exposure to a wide variety of security markets ensures that the division has “world class expertise” in providing integrated security solutions for individuals and businesses. CSG purchased Hi-Tech Security in November 2015, while Invictus Risk and 7 Arrows was acquired by the company in the first quarter of 2016.
Dry said that owing to living in a country beset by crime and violence, South Africans have become increasingly particular about implementing security systems to suit their individual lifestyle and requirements.
“Our clients want a tailor-made solution determined by their specific security risk profile and unique requirements. Although there are obviously common requirements, every client contract is different,” he explained.
Dry emphasised that there was no longer a one-size-fits-all solution for peoples’ security needs. He said that it was “critically important” for security providers to be flexible to ensure that clients security needs were made of paramount importance when negotiating all contracts.
“As we build our security platform, we are constantly on the look-out for new technology, innovation and a professional approach to training, customer excellence and high calibre of staff, which differentiates our business from others in the sector. In addition to looking for the right fit, our primary focus is on adding value for our shareholders, which is what the Stallion acquisition achieves,” he said.