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As per recent ASX announcement on 12th December, Australian company Scout Security Limited (ASX:SCT) has entered into a strategic partnership with Spain based company Prosegur CompañÃa de Seguridad, S.A. The deal involves an investment of up to USD5.3 million (AUD7.4 million).
Scout Security Limited is involved in designing and manufacturing of Scout Alarm - smartphone linked, WIFI based and battery powered home security system. Within 30 days of its crowdfunding campaign to pre-sell its devices in 2013, Scout achieved tremendous success. Since then, it has sold over $500,000 worth of its flagship product. Â
Prosegur CompañÃa de Seguridad, S.A, Spainâs largest private security company, is a global leader in security services. Its business segments include Security, Cash and Alarms. It has wide global presence across Asian and European nations.
Partnership details
The partnership involves raising AUD 2.9 million via two options via placement of 10 million shares at an issue price of $0.275 per share and a simultaneous issue of approximately 16 million options to acquire shares with exercise price of AUD 0.28 and maturity of 31 December 2019. If all the options are exercised, the company is expected to generate further capital amounting to approximately AUD4.5 million.
The collaboration between the two security giants involves a two-way deal for next one and half years where Prosegur will have exclusive rights to sell and market Scoutâs range of security offerings to cater consumer demand of key overseas markets such as Spain, Chile, Peru, Portugal and Argentina.
Deal Benefits
It is believed that partnership will support the Prosegurâs marketing activities in Scoutâs home market of the US with the aim of growing its market share, and over time increasing sales by penetrating new international markets. Scout, on the other hand, is anticipating market expansion and sales growth in Europe and Latin America with this collaboration.
As per the official statement released by Prosegur, âThe dynamics observed in the US market are the path to future developments in our markets in the residential monitoring business.â
Even Scoutâs management anticipated great growth potential for the both the companies, benefitting from the synergies of their global market presence, reputation and consumer demand in the home security landscape.
Stock performance
Scoutâs stock represents a growth of 8.33% over the last six months, but it offers a negative YTD return of 35%. The company reflects a market capitalization of $21.13 million. The collaboration news was well received by the market with share price reaching dayâs high of $0.200. Investors may want to keep the stock in their watchlist given the significant partnership agreement between two security giants.
As on 12th December 2018, Prosegur shares are trading at 4.50 EUR, up by 2.60% compared to previous close of EUR 4.38.
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