Gunnebo AB

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Gunnebo AB

P.O. Box 5181
Drakegatan 5
SE-402 26 Goteborg
Sweden
Telephone: ( + 46) 31 83 68 00
Fax: ( + 46) 31 83 68 10
Web site: http://www.gunnebo.se

Public Company
Incorporated: 1889 as Gunnebo Bruks Nya AB
Employees: 8,400
Sales: SEK 6.67 billion($703.4 million) (2001)
Stock Exchanges: Stockholm
Ticker Symbol: GUNN
NAIC: 561621 Security Systems Services

Acquisitive Gunnebo AB has quickly grown into one of the world’s leading security groups. The Goteborg, Sweden-based holding company has focused its growth efforts on developing and manufacturing security equipment, devices, and systems. The company more than doubled in size between 1997 and 2001, nearing SEK 7 billion in sales (more than $700 million). Accordingly, Gunnebo AB has restructured itself into two division: Gunnebo Security, which accounts for more than 80 percent of sales, and Gunnebo Industrier, which includes much of the company’s former operations. Gunnebo Security operates through three primary business units: Gunnebo Physical Security is the world’s leading manufacturer of safes, bank vaults, vault doors, safety deposit boxes, and other security-related devices under such major brand names as Chubb Safes, Fichet-Bauche, Rosengrens, Garny, Tann, Haffner, and Lips; Gunnebo Integrated Security produces electronic security systems, including alarm systems, entrance control systems, close-circuit television systems, as well as alarm centers, adding brand names such as Gunnebo Mayor, Metro, Italdis, Hygiaphone, and Rizenthaler; and Gunnebo Physical Security, which produces perimeter control and security systems, including fences, gates, and alarms. Gunnebo Engineering includes the company’s fastening systems, anti-skid and tire protection products, and heavy lifting machinery and equipment. That division, which produced SEK 1.2 billion in 2001, is slated to be sold off as Gunnebo completes its focus on its security products activity. Gunnebo is quoted on the Stockholm Stock Exchange and is led by Bjarn Holmqvist.

Swedish Manufacturing Force in the 19th Century

The Gunnebo entering the 21st century bore little resemblance to the Gunnebo founded in the late 18th century. Originally founded as a Swedish hammer mill by Hans Hultman in 1764, Gunnebo later came under German ownership in the 1850s. At that time, the mill was transformed into a foundry, Gunnebo Bruk, and went on to become one the largest manufacturers in its region by the 1870s. In 1889, the company was incorporated as Gunnebo Bruk Nya AB.

The Gunnebo site was modernized and outfitted with electricity in the late 1890s as Sweden underwent an extended economic boom period. The company’s fortunes continued into the early years of the century, and Gunnebo continued to grow during World War I and the Depression. In the 1930s, the company became the first in Sweden to add electroplating facilities. Then, during World War II Swedish neutrality enabled the company to continue its growth.

The second half of the 20th century saw Gunnebo specialize in a number of product categories. The acquisition of Tage Wiberg in 1945 was a first step in this process as the company became the leading producer of nails for the Swedish market. Fastening technology—as the company called its expanding range of products—was to remain a core product line until the late 1990s. Other products were added, including high-grade chains in 1955, which led the company into a variety of automotive products, including snow chains and other tire protection products. The company also began manufacturing metals and metal products for the automotive industry through subsidiary Gnösjö-Gruppen.

In the early 1960s, Gunnebo recentered its production on four main sites: Gunnebo Bruk, Sya, Soraker, and Odeborg. In response to the poor economic climate brought on by the Arab oil embargo of the 1970s, Gunnebo restructured its operations into a group of decentralized businesses more reactive to their specific markets. This move led to an increasing internationalization of Gunnebo’s sales. By the end of the 1980s, more than half of Gunnebo’s sales came from outside of Sweden.

Focus on Security Products in the 1990s

The arrival of Bjarne Holmqvist as company CEO in 1995 signaled the start of Gunnebo’s transition into a security products specialist. From the mid-1990s into the 2000s, Holmqvist led the company on a acquisition spree that transformed the company from a relatively minor Swedish manufacturer into a major player on the global security products field.

Holmqvist had been head of investment group HIDEF Kapital AB, which, in 1994, had acquired a security products company, EA Rosengrens AB. That company had been one of Sweden’s most prominent safe manufacturers since the mid-1950s and was to form the foundation of Gunnebo. In 1995, HIDEF acquired Gunnebo and then changed its name to Gunnebo AB. Then, in 1996, the company listed on the Stockholm Stock Exchange’s “A” list as it prepared for a new era of expansion.

With fresh financial backing, the new Gunnebo now set off on a buying spree. Among the first companies to be picked up were Mayor Ltd., based in England, a maker of turnstiles and other entrance control systems, and SCMD Sari, a specialist in wire-mesh and sheet metal perimeter protection products, based in France.

In 1997, Gunnebo acquired Italdis Industria, based in Italy and that country’s leading entrance control specialist. The acquisition not only extended Gunnebo’s entrance control operations into southern Europe but also established the company as one of the continent’s leaders in that market segment. While this and previous acquisitions had been of fairly small companies, in May 1997 Gunnebo made a more significant purchase when it acquired Germany’s Wego System AG Sicherheitsanlagen, which had become a leading perimeter protection and entrance control company. The Wego acquisition boosted Gunnebo’s perimeter protection business to more than SEK 900 million, giving the company the European lead in that market.

Gunnebo continued its acquisition program in 1997, buying Carl Seifet A/S, based in Denmark, adding that company’s line of safes and vaults. Soon after, Gunnebo acquired Mauser Office GmbH, based in Germany, which added a line of bank vault, safety deposit boxes, and high-security safes to the Swedish company’s growing security products offering. Meanwhile, Gunnebo was beginning to reorganize its other divisions, beginning a series of divestments of business no longer central to the company’s strategy. Nonetheless, Gunnebo continued to invest in certain areas of its former operations, such as Gunnebo Industrier, which was to group the company’s fasteners, heavy lifting, and automotive activities.

Yet security products had clearly become the thrust of the company’s future. Gunnebo’s acquisitions continued into 1998, with the creation of a French security products subsidiary, which then acquired small but well-known Hygiaphone SA, a maker of bank protection products, notably teller security windows. The company followed up that purchase with a move into Poland, acquiring Praediator Polska, a distributor of safes, alarms, and entrance control systems. That company was placed under Gunnebo’s Rosengrens subsidiary, renamed Rosengrens Praediator, and gave Gunnebo a distribution network throughout Poland. The company then stepped up its presence in Finland, acquiring Polaraidat Oy, a manufacturer and distributor of perimeter protection products.

In mid-1998, Gunnebo signed a global cooperation agreement with the United Kingdom’s De La Rue Plc; as part of that agreement, Gunnebo acquired Garny Sicherheitstechnik, the leading German manufacturer of safes and security systems for financial institutions, for SEK 63 million. Gunnebo also took over De La Rue’s Swedish safe manufacturing business. In addtion, De La Rue and Gunnebo agreed to cooperate on marketing each other’s products in selected markets.

The addition of Garny gave Gunnebo the oldest safe manufacturing operation in Central Europe—the first Garny safes had appeared in 1813 and remained one of the leading brand names in the worldwide market. With Garny, Gunnebo’s Security division was now able to claim the top European spot in security products, with sales of nearly SEK 1 billion. Garny, which focused on the banking sector, also strongly complemented Gunnebo’s Rosengrens business, which targeted especially the commercial sector.

Global Leadership in the 21st Century

The year 1999 proved an important one for Gunnebo’s new position as a security products specialist. By the end of that year, the company had sold off its automotive metals component, Gnosjo-Gruppen, to the Netherlands’ Schuttersveld. As a result of that sale, more than 80 percent of Gunnebo’s revenues now came from its security products.

By then, Gunnebo had completed another major acquisition— that of France’s Fichet-Bauche. With a history dating back to the mid-1800s, including the development of the first fireproof safes, Fichet-Bauche had grown to become the leading manufacturer of safes, vaults, and other security products in southern Europe. Fichet-Bauche not only enabled Gunnebo to extend its position across most of Europe, it also added a new business area for the group, that of the fast-growing market for electronic security equipment and systems, including access control systems and closed-circuit television systems. The Fichet-Bauche acquisition, which cost more than SEK 400 million, added more than SEK 1.6 billion to Gunnebo’s revenues. By the end of 1999, the company’s sales had topped SEK 5 billion.

Company Perspectives:

Gunnebo’s security business consists mainly of fire- and burglar-resistant safes, security products for cash handling, alarm systems, fire protection products, entrance and access control systems, alarm centres, and outdoor and indoor perimeter protection. Thanks to its very strong, leading global brand names, its range of specialized products and services, and the high standard of its service, Gunnebo now occupies a unique position on the markets in Europe and Asia. Gunnebo shall further strengthen its position as one of the world’s leading security companies by means of organic growth and via acquisition. The business shall be developed in the security area on existing as well as new markets.

Gunnebo continued its acquisition drive through 1999 and into 2000. In June 1999, the company bought up full control John Tann Security Services Ltd., which had been a provider of post-sales services for the company’s sales through its Rosengrens Tann subsidiary. The move was significant especially as it signaled Gunnebo’s intention to boost its services activities, seen as an increasingly important segment of the security products market at the turn of the new century. Another small but significant acquisition came at the beginning of 2000, when the company purchased the Security Activity of Matra Nortel Communications in France, boosting Gunnebo’s electronic security systems operations.

The year 2000 proved another turning point for Gunnebo. In August of that year, the company acquired Chubb Safes Plc, one of the world’s leading brand names in safes and related physical security products. Chubb’s history dated back to the early 19th century, when brothers Charles and Jeremiah Chubb patented the first secure locking mechanism, called the Detector Lock. In the 1830s, the Chubbs patented a new burglar-resistant safe, which helped the company become a household word. Chubb expanded throughout the rest of the century, not only within the British Empire but into the United States as well. By the end of the 20th century, Chubb had grown into a globally operating empire, employing more than 40,000, with sales topping £1.4 billion ($2.24 billion). In late 1997, Chubb was acquired by conglomerate Williams Plc, which bundled the company with another security products holding, Yale Intruder Security. Williams then sold Yale to Swedish group Assa Abloy, which in turn spun off Chubb Safes, selling it to Gunnebo.

The addition of Chubb not only boosted Gunnebo’s position in its European base but also made it the world’s leading manufacturer of physical security products, with control of four of the world’s leading brand names. Gunnebo then began preparations to focus its operations entirely on security products, restructuring its businesses under two primary divisions, Gunnebo Security and Gunnebo Industrier. The company began looking for a buyer for its profitable Gunnebo Industrier division at the end of 2000. Yet a downturn in market conditions forced the company to put the sale of that division on hold.

Gunnebo’s acquisition drive continued into the new century, notably with the purchases of Garmann Clausen AB, based in Sweden, and Jorg Clausen A/S, based in Norway, which specialized in security products for cash handling systems. Both companies were then brought under Gunnebo’s Rosengrens subsidiary. Another acquisition made in 2001 was that of France’s CS Securité, formerly part of CS Communications & Systems, strengthening Gunnebo’s electronic security systems operations. CS Securité was renamed Ritzenthaler shortly after its acquisition. Then, at the end of 2001, Gunnebo turned to the United States, buying Omega Optical Turnstiles from Pinker-tons, by then part of the Securitas group. This acquisition gave Gunnebo a foothold into the U.S. entrance control market.

With sales topping SEK 6.8 billion at the end of 2001, Gunnebo had successfully transformed itself into one of the world’s leading security products companies, its market share in certain product categories reaching 50 percent in Europe and up to 30 percent worldwide. Gunnebo showed no sign of slowing down its expansion, however. By mid-2002, the company had already made two more acquisitions, buying Germany’s Leicher Group, a leader in automated cash handling products, and Riva Systems of Denmark, a specialist in point-of-sales equipment. Gunnebo appeared gung-ho to maintain its world-leading position into the new century.

Principal Subsidiaries

E A Rosengrens AB; Rosengrens Produktions AB; Gunnebo Perimeter Protection AB; Gunnebo Protection AB; Gunnebo Troax AB; Gunnebo Entrance Control AB; Gunnebo Wego AG; Fichet-Bauche SA.

Principal Divisions

Gunnebo Security; Gunnebo Industrier.

Principal Operating Units

Gunnebo Physical Security; Gunnebo Integrated Security; Gunnebo Physical Security.

Principal Competitors

ASSA ABLOY AB; The Eastern Company; Ingersoll-Rand Security and Safety; Masco Corporation; Master Lock Company; Napco Security Systems, Inc.

Key Dates:

1764:: Gunnebo hammer mill is founded by Hans Hultman.
1850:: Gunnebo mill is converted into a foundry and manufacturing plant and named Gunnebo Bruks.
1889:: The company is incorporated as Gunnebo Bruks Nya AB.
1945:: Gunnebo acquires Tage Wiberg and becomes the largest producer of nails in Sweden.
1980:: The company adopts a decentralized organization and focuses on export sales.
1994:: HIDEF Kapital AB, led by Bjarn Holmkvist, acquires Rosengrens, a maker of safes and other security products.
1995:: HIDEF acquires Gunnebo, then changes its own name to Gunnebo AB and begins to specialize in security products.
1996:: Gunnebo joins Stockholm exchange’s A list and begins aggressive acquisition program.
1999:: The purchase of Fichet-Bauche, of France, marks Gunnebo’s largest acquisition to date as sales top SEK 5 billion for the year.
2000:: Gunnebo acquires Chubb Safes, making the company a world-leader in the physical security products market.
2001:: Gunnebo gains a foothold in U.S. entrance control systems market with purchase of Pinkerton subsidiary Omega Optical Turnstiles.