Cash-carrying The Brink's Co. is expanding in Mexico by buying the country's largest secure logistics company, Servicio Pan Americano de Proteccion.
Brink's paid $60 million for approximately 79 percent of SPP, which is expected to have about $385 million in revenue in 2010 and $400 million in 2011.
Brink's has owned 21 percent of SPP since 1965, and acquired almost all of its remaining stock from a banking consortium. A Mexican company will continue to own a small portion of the company to comply with Mexican law.
By The Numbers: U.S. Surface Trade With Mexico.
Mexico's cash-in-transit market is the fifth largest in the world, according to Brink's, with total revenue estimated at $900 million. Mexico's violent battle against drug cartels and organized crime increases the need for secure transportation.
SPP employs about 12,000 people at 80 branches and operates 1,350 armored vehicles across Mexico. SPP's revenue has increased between 5 and 8 percent in each of the past three years, with operating margins in the 1 to 2 percent range.
"Our longer-term goal is to achieve operating margins that exceed 10 percent," said Michael T. Dan, chairman, president and CEO of Brink's.
Latin America includes Brink's fastest growing and most profitable operations, Dan said. SPP expects a slight loss in 2011, however, as it reorganizes.
-- Contact William B. Cassidy at email@example.com.