Kagiso Trust Investments (KTI), the investment arm of the Kagiso Trust, has acquired a 25% stake in Group 4 Falck South Africa, the country's third largest guarding company, which was formed through the acquisition and merger of ASC Federal and Callguard Security Services in 2001. This latest investment for an undisclosed amount is a renewal of a relationship which KTI previously had through its private equity arm, Kagiso Ventures, when it held a stake in the former Callguard Security Services.
While the security industry has seen significant multinational investment over the last four years, according to Douglas Brake, Group 4 Falck South African managing director, this is the largest empowerment deal concluded in the local security industry. Says Eric Molobi, executive chairman of KTI: "In 2001, when Group 4 Falck was looking to invest in a South African operation which would give it broader exposure and a greater local network to service its international clients, we opted to realise the benefit of our investment in Callguard. At that time, Callguard had provided KTI with a sound investment and we were able to realise a significant return through the sale of our interest to Group 4 Falck.
"We declared our intention to reinvest at a later stage, after the completion and bedding down of the merger, and in December 2002 we re-entered discussions. The result is that we have reinvested at the local level in an operation which is more than double its original size and which has the international backing of a strong multinational security and guarding operation. A distinct advantage is that it still retains much of the same management team with which we had dealt so successfully in the past."
The transaction sees Molobi's appointment to the board of Group 4 Falck South Africa as non-executive chairman as well as a second KTI appointment to the board. As board members, each will take on certain operational responsibilities as active members of the transformation, audit and business development committees.
Services offered by the South African operation include: CCTV, alarm installation, control centres, VIP guards, patrol guards, stationary guards, reception services, security training and consultancy, risk management consultancy, project management, remote site management and aviation training and consultancy.
Says Brake: "As we have had certain restrictions on growth for the last two years, particularly in the public sector due to the interim lack of empowerment, we will now undertake a major drive amongst the public sector. We will also focus on organic growth amongst the private sector and will leverage our specific areas of industry specialisation, in order to build our client base.
"We see ourselves as a company which is well-positioned as a quality service provider in a variety of facilities management services, such as security, guarding, CCTV, fraud detection and investigations amongst others. This makes us a perfect fit with other KTI investments such as Compass Group Southern Africa - which incorporates KKS catering and other food services - and its other investments in fleet management, facilities management, cleaning and scaffolding services.
For more information contact Group 4 Falck, 011 887 8800.
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