Sweden’s Securitas has agreed to acquire the Public Safety & Solutions (PSS) division of Kratos Defense & Security Solutions [KTOS] in a deal that expands its work in the U.S. and strengthens its electronic security platform.
Securitas’ U.S.-based Securitas Electronic Security, Inc. business is acquiring PSS for $70 million. The division has about 400 employees and had $149.9 million in sales in 2017, up 18 percent from $127.1 million in 2016. The division swung to a $3.8 million operating profit in 2017 from a $3 million loss the prior year.
The PSS division’s product areas include video surveillance, access control, communications, building automation, fire and life safety, and maintenance and services for its products. The company also does systems integration.
Kratos often announces contracts for the division without disclosing the customer. For example, last July the company announced PSS had received a $3.5 million contract to provide systems for critical infrastructure security.
“KPSS is an ideal acquisition for Securitas as it supports the global Securitas electronic security strategy and strengthens the company’s electronic security platform,” says Tony Byerly, president of Securitas Electronic Security, Inc. “In addition, it is an important next step in the execution of Securitas’ North American strategy to provide a complete range of protective services to the company’s collective customer base. For SES, it expands our national footprint in the U.S., adds highly skilled associates to the team, and opens new markets and opportunities for future growth.”
Byerly also says that the “acquisition is about growth, strengthening our core capabilities, expanding our portfolio of security solutions, entering new markets and exploring new technologies to best serve our customers.”
SES’ solutions include video, access control, intrusion monitoring and detection, fire detection and systems integration.
For Kratos, the pending divestiture will allow it to focus on its defense business. The sale is expected to close during the second quarter of 2018 pending regulatory approval.
Canaccord Genuity is Kratos’ financial advisor on the deal.