Scout Security Ltd (ASX:SCT) has entered a proposed strategic and commercial partnership with multinational security company Prosegur to distribute Scout’s suite of branded security products in Prosegur’s key global markets.
The partnership includes an equity investment from Prosegur of up to $7.4 million in two tranches, which will support Scout’s US market position with the aim of international expansion.
The investment from Prosegur has been structured as a placement of 10.837 million shares at an issue price of 27.5 cents a share and more than 16 million options exercisable at 28 cents.
The share placement will raise about $2.9 million and if all options are exercised Scout will receive a further $4.5 million.
Scout co-founder & CEO Dan Roberts said the company was excited to be partnering with such a strong global security player and welcomed Prosegur to its register.
Prosegur has more than 175,000 employees and is active in the manned guarding and technology, cash-in-transit and alarms businesses through its Prosegur Security, Prosegur Cash and Prosegur Alarms business segments.
Prosegur Alarms generates more than $391 million in annual revenue from over 500,000 alarm connections in 11 countries.
Roberts said: “Working with such a well-regarded global company to help grow sales of our products in Europe and Latin America is another key milestone validating Scout’s offering and represents a huge opportunity to jointly expand our market presence.
“The investment side of the partnership will ensure we are well-funded to execute on our go-to-market plans.
“[It will also] allow us to tap into what we believe is outstanding potential to build a strong book of business in the fast-growing DIY home security space.
“This strategic partnership and investment with Prosegur adds another significant partner to our growing list on both the branded and white label sides of the business.
The commercial agreement includes terms to negotiate a formal arrangement over the next 18 months, which will grant Prosegur exclusive rights to distribute Scout’s products in Spain, Portugal, Argentina, Peru and Chile.
Scout also anticipates it will grant Prosegur exclusive rights to its products and technology under the formal arrangement, with Prosegur providing Scout access to a range of opportunities and strategic services.
Both security-focused companies have identified a large opportunity to increase the customer base in the alarms industry by offering a broader range of products and services such as DIY security systems.
Prosegur Alarms chief technical officer Leonardo Gutiérrez said: “The dynamics observed in the US market are the path to future developments in our markets in the residential monitoring business.
“We are partnering with one of the most innovative and client-oriented companies in this segment, from whom we are keen to learn and to open our ecosystems to boost their growth.
“We are aligned with Scout’s team on how we envision the future of our industry and we have high expectations for this partnership.”