Tenon acquires 51% stake in Singapore-based Frontline Security

Facility management and security services provider Tenon Group has acquired a 51 per cent stake in Singapore-based security service company Frontline Security Pte Ltd for Rs 19 crore (£1.9 million or $2.8 million) in an all equity deal, the company said in a statement.

Tenon will invest more capital to acquire additional 25 per cent stake to achieve 76 per cent of the total paid up capital in three years.

“This acquisition aligns with our strategy to be a global leader in the security and facility management domain by providing credible services with leading technology. The acquired firm is positioned to capture growth opportunities created by the rapidly evolving security industry,” said Major Manjit Rajain, group chairman, Tenon Group.

“The acquisition is in line with Tenon’s strategy of expanding its geographical footprint and growing the business through targeted acquisitions,” he added.

This comes soon after VCCircle reported that the company is looking at expanding through inorganic ways and is in talks with at least three target companies. 

This acquisition also comes soon after it acquired UK-based facility management company Office & General Group Limited (O&G) in August this year.

With this acquisition in Singapore, the company has entered a new market and also takes its revenue to Rs 1,200 crore at the group level. “Singapore market is not a large market but a mature one. We have acquired majority stake with the option of buying out the balance in one-and-a-half years.”

The company will also use the platform to grow organically by putting in more capital. It also aims to acquire more firms in the Singapore market to add to the newly created platform.

He also informed that the next acquisition will be in India while clarity on the third target is yet to emerge.

Tenon, whose holding company Mortice Ltd is listed on London Stock Exchange, is also preparing the groundwork to float its local business as a separate listed firm in India. Apart from acquisitions, it also intends to raise capital from private equity funds before it hits public market. 

“We are in conversations with PE firms but it is too early to comment on it,” he said.

Founded in 2006, Frontline provides services across 73 sites in Singapore. Its services include security management, consultancy services and training, as well as supplying security and surveillance products including CCTV systems, GPS tracking systems, metal detectors, biometric time and attendance systems and vehicle surveillance systems.