Loomis Set to Acquire Prosegur in France30th April 2019
Cash handling company Loomis have agreed to acquire Prosegur’s cash operations in France, reducing the number of global suppliers in the French market to just two. The cost of the deal is undisclosed but will bolster Loomis’ pan-European offering and give multinational merchants the opportunity to consolidate their arrangements further, although local French merchants may suffer as a result of less competition in cash handling.
The final purchase price is yet to be determined, but the acquisition is expected to close in the third quarter of 2019 – pending local works council procedures and approval by the French foreign investment regulator.
Prosegur has approximately 630 employees in France and the annual net revenue in 2018 was approximately EUR 38.5 million. Patrik Andersson, President and CEO of Loomis, said of the deal:
The French cash market is large and important to Loomis. PCF is an operationally solid cash handling business that complements Loomis France present customer portfolio and geographical footprint very well. We look forward to increasing our presence in France and are happy to welcome all new employees and customers to the Loomis group.
Indeed, the French cash market remains relatively robust compared to other European economies, particularly in terms of the overall value of transactions (Figure 1), where the market share of cash has actually grown by 0.24% annually over the past 3 years (Figure 2).
This move continues the Europe-wide trend of two major suppliers operating in any one market in the long run (Figure 3). Duopolies like this can often result in a lack of innovation and upwards pressure on pricing which, in the CIT industry, means higher charges for merchants and a worsening of service levels.
In terms of pan-European capabilities, Loomis can now add France to a long list of markets where they offer a national service. Multinational merchants looking to consolidate their cash arrangements under a single supplier in some or all of the markets they operate in may now find Loomis’ proposition more appealing, although this very much depends on the location of merchants’ sites.
For example, a merchant operating across Scandinavia would likely be able to consolidate under Nokas, whereas as merchant operating in the Benelux region could do so under G4S. Prosegur will still be able to serve the Iberian Peninsula, while Loomis are able to offer coverage across more than 12 markets.
Merchants currently engaged with either Prosegur or Loomis in France must actively monitor their cash arrangements for any price changes leading up to or following the closing of the acquisition. Additionally, merchants using Brinks for cash handling in France should keep a close eye on pricing once the deal is completed. Merchants operating in other countries should remain on the lookout for any further expansion from Loomis, or a retaliation from one of the other major carriers.
Regardless of current supplier or site locations, the key for any merchant operating across Europe is to review their cash arrangements now: not in a few years’ time when high fixed costs and declining cash volumes could combine to cause per-transaction fees to skyrocket.