The surprise announcement caused Securitas’ share price to rise immediately by 15 percent. The plan was announced on Thursday after the company released a report showing strong results for the fourth quarter of 2005, and for the year as a whole. The demerger needs first to be approved by an Extraordinary General Meeting in September.
The move to float the divisions on the Stockholm Stock Exchange makes sense, according to Thomas Berglund, CEO of Securitas.
“Our decision to create and list three new companies and release the entrepreneurial spirit is a logical step considering our history and our ambitions for the future,” he said.
“It is a clear signal to customers, employees and the financial markets that we intend to stay ahead.”
Berglund said that Thursday’s decision was the next step along a path trod by Securitas for the past 20 years. Lockmaker Assa Abloy was split off from the company 12 years ago, and has since gone on to become the world’s largest lock company.
The companies now being floated are Loomis Cash Handling Services AB, Securitas Direct AB and Securitas Systems AB.
“It is know time for those creating large electronic systems, those creating domestic alarms and those involved in cash handling to start their own journey. This is to make us better for our customers and therefore grow quicker,” said Berglund.
He denied that the move had anything to do with the recent spate of robberies of Securitas cash transits in Sweden. This problem was unique to Sweden, Berglund said, and said it was something Securitas had tried to deal with.
“Cash transit in Sweden represents one percent of Securitas’ operations, so the problems we have at the moment have had no effect at all on the decision to demerge the companies.
The break up will give four different shares for every existing share. There will be no extra tax costs for shareholders or for the company.
The demerger comes as Securitas has turned around its American business and has shown good growth in all its businesses. Sales in the fourth quarter of 2005 reached 17.7 billion kronor, a rise of 5 percent on the same quarter in 2004.
Profits for the quarter were 1 billion kronor, unchanged from the previous year. Profits were dragged down with losses associated with the sale of its German cash handling business.
“We failed there, and we will try and learn from that,” said Berglund, adding that he was optimistic about the prospects for the four companies to be created.