Brink's to spin-off BHS
RICHMOND, Va.--The Brink's Company's spin-off of Brink's Home Security into its own publicly traded entity, announced Feb. 25, will mean a more "focused investment" for current shareholders and will "create opportunities for [Brink's Home Security] employees," said Ed Cunningham, spokesman for The Brink's Company.
"Any time you have the opportunity to become an independent company, there's new opportunity for growth," he said.
Brink's Home Security is one division of The Brink's Company. The other, Brink's Inc., is a transportation and cash management business.
Major stockholders, including hedge funds like MMI, Steel Partners and Pirate Capital, have been demanding a spin-off or sale for more than a year (search "Brink's" and "spin-off" at www.securitysystemsnews.com for continuing coverage).
The spin-off is expected to take the form of a tax-free stock distribution to current shareholders of the The Brink's Company in the fourth quarter of this year. After the spin-off, shareholders will hold shares of two standalone, publicly traded companies.
In addition, the company announced that it had reached an agreement with MMI Investments regarding nominees to the board of directors. MMI, which owns 8.4 percent of Brink's stock, last November announced that it would nominate a slate of four directors--which included Peter Michel, former CEO of Brink's Home Security--at the company's annual spring meeting.
MMI has agreed not to run the full slate of four directors. In return, Brink's agreed to expand its board by one member and nominate one of MMI's nominees, Carroll Wetzel, as a director at its May 1 annual meeting. After the spin-off, Wetzel will become a member of The Brink's Home Security board of directors and Robert Strang, another of MMI's original slate, will be nominated to take Wetzel's place on the Brink's Inc. board.
Jerome Lande, partner with MMI, said MMI "applauds the decision to spin off BHS and believes Brink's is taking the right steps to improve shareholder value. We're also pleased that Brink's has agreed that our nominees can contribute positively to the boards of Brink's and BHS."
Brink's Home Security has approximately 3,600 employees and had revenues of roughly $484 million in 2007, with operating profits of $114.2 million. The company has residential and commercial installation and service business in all 50 states and the western provinces of Canada, and has approximately 1.2 million systems under monitoring contracts.
Will Brink's Home Security president Bob Allen become CEO of the newly independent Brink's Home Security? These and many other important details--there are regulatory issues, SEC requirements, capital structure questions, for example--will be ironed out over the next several months, Cunningham said: "It's a work in progress."