With ongoing consolidation amongst security services heavyweights, many wonder whether an outright acquisition between the two largest privately held companies – Brinks and Garda – could occur. While they maintain a robust strategic alliance, Brinks has not acquired Garda outright. Still, their partnership signals a trend of collaboration between competitors in an industry where scale and technology grow ever more important.
Introduction: Profiling the Major Players
Brinks and Garda dominate the global private security services landscape. Before comparing them in-depth, let‘s examine key facts about each company.
Brinks
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Founded: 1859, Chicago, IL
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Headquarters: Richmond, VA
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2020 Revenue: $3.7 billion
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Employees: ~70,000
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Services: Cash-in-transit, ATM servicing, secure logistics, international transport, vaulting
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Global Presence: 100+ countries on 6 continents
Garda
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Founded: 1995, Montreal, Quebec
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Headquarters: Montreal, Quebec
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2020 Revenue: $2.1 billion
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Employees: ~102,000
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Services: Cash logistics, private security, investigations, global risk management
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Global Presence: 65+ countries across North America, EMEA, Asia Pacific
Now that we‘ve outlined the scale of each company, let‘s analyze the alliance between these two security titans.
Why a Strategic Alliance Instead of Acquisition?
In 2016, Brinks and Garda announced an intriguing partnership. This strategic alliance involved collaboration across overlapping geographical markets and business lines. For instance, Brinks vehicles can now utilize Garda cash processing centers and vaults in Canada.
But why connect forces instead of acquiring?
The alliance provides three key benefits:
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Access to expanded infrastructure and capabilities without expensive M&A
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Reduced competition between two industry juggernauts
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Leveraging combined scale to lower costs and boost competitiveness
Importantly, both companies maintain their independence and separate identities.
Challenges of Potential Acquisition
While the partnership model has advantages, a full acquisition of Garda by Brinks or vice versa would prove difficult for several reasons:
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Ownership Structures: Garda is owned by a large PE firm reluctant to sell.
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Antitrust Concerns: Combined market share could draw regulatory scrutiny.
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Culture Clash: Major integrations bring challenges in merging operations.
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Limited Complementarity: Overlaps in markets and capabilities pose issues.
An acquisition could also saddle the acquirer with excessive debt or overpayment without guaranteed benefits. Therefore, the strategic alliance represents a kind of "happy medium" providing many synergies of M&A without the full risks.
By the Numbers: Brinks vs. Garda Scale
In a global market set to reach $274 billion by 2025, Brinks and Garda are far and away the largest private security services firms worldwide as measured by revenue and personnel.
Key Metrics
| Company | 2020 Revenue | Employees | Countries Served |
|---|---|---|---|
| Brinks | $3.7 billion | ~70,000 | 100+ |
| Garda | $2.1 billion | ~102,000 | 65+ |
Global market size forecast source: Fortune Business Insights
Both firms saw steady revenue growth pre-pandemic, indicating sustained demand for security services:
Revenue Growth
| Company | 2017 | 2018 | 2019 |
|---|---|---|---|
| Brinks | $3.2 billion | $3.5 billion | $3.7 billion |
| Garda | $1.6 billion | $1.9 billion | $2.1 billion |
However, Garda‘s revenues from North America only comprise ~60% of the total, compared to ~85% for Brinks, signaling more international diversification.
How Do Brinks and Garda Compare in 2022?
When it comes to services, reputation, and technology, Brinks and Garda have key similarities and differences:
Services:
- While both handle cash-in-transit, Brinks focuses more exclusively on secured logistics whereas Garda offers a wider range including guards.
Reputation:
- Long track records of reliability and trustworthiness. Garda rates slightly higher in customer satisfaction.
Technology:
- Both leverage sophisticated tech like AI, IoT, biometrics, and more. Garda invests more heavily in next-gen software and solutions.
Let‘s look at two examples of innovation:
Brinks
- Added 8,000 connected vehicles, using IoT and telemetry for real-time monitoring and service verification.
Garda
- Launched a Machine Learning-powered platform called CAMERA.AI designed to detect threats and anomalies more accurately.
Acquisition Activity Still Heating Up
Despite no major deals between Garda and Brinks, M&A activity continues heating up across the security services sector.
For example, Brinks acquired:
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Dunbar Armored (cash handling) in 2017
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G4S cash handling operations in multiple European countries in 2020
Consolidation allows companies to expand into new geographical markets and business lines. Smaller regional players are most at risk of acquisition.
The Outlook for Brinks, Garda, and the Industry
While Brinks and Garda continue independently, expect strong growth as populations and risks expand globally. Both appear primed to thrive based on brand strength, resources, and constant innovation.
More strategic alliances between the largest firms seem probable as well – the Brinks/Garda partnership could pioneer similar arrangements across the industry.
With their vast infrastructures and ability to leverage new technologies, Brinks and Garda should remain market leaders while shaping the future of the global security services sector at large.
