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Send  Share  RSS  Twitter  21 Jun 2010

SECURITY: Command Needs To Muster Again

 



Recent Western Cape Business News

COMMAND, the Cape-based security group which holds a number of high profile clients in and around Cape Town, appears to have lost out on a golden opportunity to bulk up its business.

In late April Command called off talks with undisclosed parties that were largely believed to be around making a sizeable acquisition. Some reports suggest Command was in talks with empowerment heavyweight Mvelaphan-da Group, which holds numerous security services interests (including Coin Security, the cash-in-transit specialists).

While Command is a profitable entity with annual turnover of over R150 million, the business has been looking at ways to bulk (and diversify) its security services for a number of years.

Currently Command’s services encompass value-added guarding, cash-in transit, forensic investigation, electronic security, alarm installations and monitoring, armed response service and security consultancy.

CBN wonders whether now – with the Mvela deal purportedly off the table – Command will finally look to concluding a long mooted deal with Cape Empowerment (Capemp).

The deal looks a no brainer. Capemp holds a strategic 24.4% stake in Command, but the empowerment company also has its own fledgling security and services firm called Alexa.

Possibly the only reason why Capemp and Command have not figured out a bulking up arrangement might be because the former has been preoccupied with debt culling exercises and rearranging its listing vehicles on the JSE.

Command and Alexa look an almost perfect fit – and it seems illogical for Capemp to have an associate company and a subsidiary going head to head in a competitive security services market.

Currently Command’s major clients span the hospitality, retail, corporate and manufacturing sector. Clients include Constantia Uitsig, the Lord Charles Somerset Hotel, Erinvale Hotel and the Protea Hotel in Stellenbosch, Pick n Pay, PEP, Old Mutual Properties, Murray & Roberts, Absa Bank, FNB, Clovelly Golf Estate, Kenilworth Race Course, Gold Circle Racing, Delmonte, Metrofile and Tridonics.

Command also offers diplomatic guarding services and personal security to the Italian Embassy, the City of Cape Town, the Department of Public Works and Stellenbosch Municipality.

Alexa’s primary security services include guarding, forensic investigation, video and electronic surveillance and (gulp) undercover investigations.

Alexa’s client list is also leaning towards the hospitality sector with the Mount Nelson, the Radisson in Granger Bay, Arabella and the Grand Westin listed as major contracts. Other clients include Sportsmans Warehouse and Medi-Cinic.

While it seems a fast growing client base could mean Alexa has grown to something close to the size of Command, Capemp’s results to end December 2009 showed Alexa making a loss of over R15 million – although this figure did include a goodwill impairment charge of nearly R13 million.

Quite possibly Capemp may be the prime mover in efforts to bulk up Cape-based security assets. In April last year Capemp acquired Bellville-based Toto Security for R6 million.

It would not cost Capemp too much to take control of Command as the company is valued at less than R30 million on the JSE currently. But some may argue it would be better – especially in terms of future fund raising – to inject Capemp’s security assets into a separately listed vehicle like Command.


 
 
 
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