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SIS Ltd, the country’s largest security & facility management firm, is eyeing acquisitions in India ranging between ₹50 crore and ₹1,000 crore, covering segments that include security businesses and niche facility management. Discussions are under-way and term sheets of prospective companies are being looked into, Dhiraj Singh, CEO of the company, told businessline.
The company is also working on listing its cash logistics business on the bourses as a separate entity. The cash logistics business is a JV with Madrid-headquartered Prosegur which holds 51 per cent. The remaining 49 per cent is with SIS.
“Over the next three months or so, we should be able to make some formal announcement on the acquisitions. Most of these are in India particularly segments where margins are higher,” Singh said.
According to him, SIS Ltd has been able to bring down debt-EBITDA ratio to 1.47, down from 1.76 in the previous quarter (ending June 30, 2024). Post acquisitions the company would look to keep the debt-EBITDA levels below 2.
“So we fund the acquisitions in a such a way that an upfront payment of 51 per cent is made, and the rest are done in tranches or spread out in such a way that the debt – EBITDA levels are maintained below the 2 threshold,” he said.
For the quarter ending September 30, 2024, gross debt (India and international business put together) was at ₹1,684 crore, while cash and cash equivalents for the period was ₹827 crore. Net debt stood at ₹857 crore, down ₹166 crore from the earlier quarter where it stood at ₹1,233 crore.
Revenue rises 6.4%
On a consolidated basis, revenue for SIS Group increased by 6.4 per cent y-o-y to ₹3,269 crore. The India Security reported revenues of ₹1,384 crore, up over 6 per cent (for the quarter under review) while the facility management business saw a 4.8 per cent y-o-y growth to ₹553 crore
Its international presence, through the security buisiness covers Australia, New Zealand and Singapore.
Cash Logistics Business
According to Singh, the SIS Board has already given a go-ahead for “unlocking value” of the cash logistics business – the JV with Prosegur.
The management had previously said it was looking to demerge its cash shareholding – a probable mirror image demerger. In a mirror image demerger, very shareholder of SIS will get a proportionate share in the JV to the extent of that 49 per cent. Details were being worked out.
“In the cash joint venture that we run, we want to unlock value. So, listing it via a demerger is something that we are exploring,” he said.
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