Zicom Business Restructuring to focus on high growth sunrise sectors

Mumbai, March 05, 2010: Zicom Electronic Security Systems Limited, India's leading electronic security solutions providers, today announced strategic restructuring in its business model to refresh its focus on the home & SME electronic security markets and its Middle East Operations, while also moving into high growth sunrise sectors.

The electronic security major has been operating in all segments of the market since its inception in 1995, be it institutional, government, home or retail. The institutional and government business of the company is represented by Building Solutions Group (BSG) and Special Project Group (SPG) while the SME business is represented by Zicom Retail Products Pvt. Ltd and the fire business by Unisafe Fire Protection Services LLC, Dubai.

In order to improve focus on the retail segment, which is expected to deliver high growth with higher margins, Zicom has signed a Business Transfer Agreement with Schneider Electric for the integration business comprising of BSG & SPG business which caters to institutional & government markets. This market is characterized by high project gestation periods and has been seen to be capital intensive. Further with the changing market dynamics, most of the commercial buildings are demanding an "Integrated Building Management Solutions (IBMS)" having a mix of both IBMS and Security which are integrated and converged.

Zicom being a pure play security company could not take advantage of the market place. Thus the agreement with Schneider Electric, the global specialist in Energy Management was seen as a good decision.

Going forward Zicom would continue to be a dominant player in the security business concentrating and building on its SME and Home Security Business. The retail business is expected to grow with increase in awareness levels & demand. Zicom is also introducing revolutionary technology and solutions to this effect.

Speaking on this agreement, Mr. Manohar Bidaye, Chairman – Zicom Electronic Security Systems Limited said, "After 9/11 terrorist incident the security industry is undergoing sea change, particularly the integration business where we are dominant brand.  The security integration business is getting into the next platform which is IT driven, complex networks and highly capital intensive. The new business demands high level of Integrated Intelligent Building Management technology and knowledge for which Zicom will need to make huge investments, going forward. In view of this change it seemed best to exit the business when the value is attractive and to focus on building the remaining retained business of Home and SME together along with the profitable Fire business which is strength of our subsidiary in Middle East.

It also allows us to diversify into new businesses, alternative energy and aerospace engineering being two that have been identified, which are seen as sunrise sectors, with huge growth and margin possibilities. We will significantly improve our shareholder value with this transaction, which would also make us debt free and leave cash for our expansion plans."

The BTA offer is at substantial premium over the current market cap of approx Rs. 140 crore, considering the fact that retained business contributes 52% of the total Group revenue which stands at 375 crores for the Nine month ended December 31st 2009.

The Company will continue to retain the brand name Zicom, Retail Business and the profitable Fire business where Unisafe Fire Protection Specialist L.L.C, Dubai is having expertise and is chalking plans to venture into newer business opportunities.

Prime Securities Ltd, Investment Bank has acted as an exclusive advisor to the company for the above transaction.

About Zicom Electronic Security Systems Limited:
Zicom Electronic Security Systems Limited is the leading electronic security solutions provider in India, having a consolidated turnover of more than Rs. 376 crores for the year ended March 31, 2009. The Company offers a wide range of products including access control systems using keypad, proximity card & biometrics, CCTV surveillance including remote video surveillance, fire alarm systems, smart cards, perimeter protection system, law enforcement products, etc. The Company has also integrated all this multiple security applications into one coordinated hardware and software package. The Company has got strong software capabilities relating to the security business.

Since its inception in 1995, Zicom has always driven the market with innovations. Zicom pioneered the concept of Central Monitoring Station in India. The Company was the first to introduce wireless security systems. Zicom services the diverse and demanding security needs of private and public sectors. Its customers include several large Indian and multinational companies in the field of Infotech, telecom, media, banking, finance, industrial, etc. as well as various public sector units.

For further information, please contact:
Sunayan Shahani
Hanmer MS&L
Ph: 022 - 6752 4669
Mobile: 98331 72756 Email: sunayan@hanmermsl.com