SoftBank in Early Talks to Buy Allied Universal for Up to $18 Billion

SoftBank Group is in early stage talks to acquire Allied Universal, one of the world's largest private security firms, in a deal that could value the company at as much as 18 billion dollars excluding debt, the Wall Street Journal reported.

Allied is backed by the US buyout firm Warburg Pincus and the Canadian pension fund La Caisse. Bloomberg first reported the talks on Friday, October 16, and Reuters reported the same day that deliberations were preliminary and no final decision had been made on price. The Journal's reporting confirms the talks are live. A deal is far from certain.

Why a security company fits an AI bet

At first glance, guards do not look like an AI business. Allied provides armed and unarmed security guards and security technology in more than 100 countries and territories, with annual revenue of about 23 billion dollars, according to its website. It also has a growing business around data centres, helping to build and run the sites SoftBank's AI plans depend on.

The logic, as Bloomberg reported, is physical work. SoftBank founder Masayoshi Son is exploring AI powered robots across industries, and with Allied the group would look to replace some staff with robots for certain security tasks over time. Humanoid security workers would take longer. Allied already sells AI tools of its own, including real time data collection and incident and GPS tracking for clients.

Son's pattern

This is not a detour from SoftBank's recent course. The group has put 64 billion dollars into OpenAI, holds a majority stake in the chip designer Arm, and last year agreed to buy the robotics business of the Swiss engineering group ABB for 5.4 billion dollars. The Allied talks would extend the same idea from chips and software into fleets of machines doing routine work in the real world.

SoftBank declined to comment on the original Bloomberg report, and Allied Universal did not immediately respond to a Reuters request for comment at that time.

What happens next

Early talks often end with no deal, and the price, structure and financing are all undecided. If the talks advance, expect two questions to follow the deal everywhere. The first is financial: Allied's work is labour heavy and low margin compared with the software bets SoftBank is known for. The second is human: a plan built in part on robots doing guard work will be read closely by the hundreds of thousands of people who do that work today.