Brink's sale of BAX rumored for this weekend

Thursday, November 10, 2005

RICHMOND, Va.--Published reports that The Brink's Company would sell its freight delivery unit, BAX Global, to a German transportation company boosted Brink's stock price by 9.9-percent to a new 52-week high on Monday.
Stock speculations seemed to level off after Monday in anticipation of concrete news about the sale, which may come as soon as Nov. 12.
The Brink's Company's plan to put Irvine, Calif.-based BAX up for sale was first reported last June. This week's reports named the buyer, Deutche Bahn. And, on Nov. 9, Reuters reported more specifics: a "source close to the negotiations" said that the Deutsche Bahn supervisory board would meet on Nov. 12 to consider a bid for BAX in the amount of $1.12 billion.
Several industry observers, including Jack Mallon, of Mallon Associates of New York City, believe the sale of BAX would allow Brink's to focus on its profitable home security division.
"Selling BAX would be a big plus. It would allow Brink's to get rid of a major drag on the company. BAX has been losing money for many years. Although it is profitable at the moment, margins are well below the profit margins for armored cars and brinks home security," Mallon said.
"The divestiture of BAX would convert Brink's into a pure-play security Goliath," Mallon said. "As a result, Brink's should be more focused on running one of the largest armored trucking and alarm operations in the country," he added.
No one at Brink's was willing to discuss the sale. Calls to Brink's Home Security were referred to Brink's corporate headquarters in Richmond, Va. Calls to the corporate headquarters were not returned. At BAX, Spokeswoman Marie Connell said, "We will not comment on rumors."
For more on this story, see the December issue of Security Systems News.