Loomis Seeks Cash-Handling Global Top Spot Through Acquisitions
Loomis AB (LOOMB), spun off from Securitas AB in 2008, is seeking acquisitions in emerging markets from Chile to Ukraine, armed with a budget of almost $300 million in cash and credit lines, Chief Executive Officer Lars Blecko said.
The Swedish company aims to enter at least two new countries every year and seeks to be among the top two players in each market, Blecko said. Its focus is on Latin America and eastern Europe as it takes on larger competitor Brink’s Co. (BCO), based in Richmond, Virgina, and G4S Plc (GFS), based in Crawley, England.
“We’re eying the top spot globally thanks to our growth strategy,” Blecko said in an interview June 1.
Emerging markets offer a buffer to some traditional markets like Spain, where a shrinking finance industry has lowered the number of bank branches requiring cash-transportation services. Even so, with the onset of the European debt crisis, cash usage has increased in nations such as Spain further offsetting a scale back in banking operations, he said.
Loomis got an initial foothold in Turkey last year when it bought 60 percent of Erk Armored, which mainly operates in the region around Istanbul. Loomis wants at least 30 percent of that market “over time,” the CEO said.
Other countries that Loomis is scouring for opportunities include Argentina, Chile, Peru, Bolivia, Uruguay, Poland, Romania, Ukraine and Turkey. It also wants to buy more companies in the U.S., where he said Loomis’s 28 percent market share is slightly ahead of Brink’s.
Muted Crisis Effect
Overall, Loomis has had a limited effect from southern Europe’s debt crisis, he said. In Spain, it competes with Madrid-based Prosegur Cia de Segurida and each has about 49 percent of that market, he said. Loomis’s Spanish retail customers such as grocery chain Mercadona SA are handling more cash than before.
“There’s more cash handling on the retail side, while people go less often to the bank,” he said. “The worse the economic times are, the bigger the cash portion of transactions. It serves as a hedge for us.”
Loomis was created in its current form in 2008 when it was spun off by Securitas AB (SECUB), the world’s second-biggest guarding services company. It traces its deeper roots to when Wells Fargo & Co. was founded during the California gold rush in 1852.
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