The Brink’s Company (NYSE: BCO) shares rose 1.4 percent today after the security company announced that it would spin off its home security unit in order to appease a growing number of dissident shareholders. The news comes after enormous pressure from activist shareholders Pirate Capital and MMI Investments, both of whom planned proxy contests to overtake the board if changes were not implemented. The company has finally agreed with the activists after completing a review of its strategic options with the help of the Monitor Group and Morgan Stanley. The Brink’s Home Security unit is one of the largest and most successful residential alarm companies in North America and the spin-off should unlock substantial value for shareholders who have been struggling to realize value in their investment.

“Today’s announcement, which is the culmination of a comprehensive and thorough review of the strategic options available to the company, further demonstrates the board’s commitment to enhancing shareholder value,” said Michael T. Dan, chairman, president and chief executive officer of The Brink’s Company. “Both BHS and Brink’s, Inc. are market leaders that outperform their respective peers on almost every operating metric. As separate publicly traded entities, each company should benefit from enhanced management focus, more efficient capitalization and increased financial transparency. In addition, shareholders will have a more targeted investment opportunity, and incentives for management and employees will be more closely aligned with company performance and shareholder interests. Given these advantages, we are confident that this transaction will enable BHS and Brink’s, Inc. to more quickly realize the valuations they deserve. I commend the employees of both BHS and Brink’s, Inc. for their hard work and dedication in building these two great businesses. I am confident that both companies will continue to create value for their shareholders, employees and customers.”

The spin-off will convert Brink’s into two separate publicly traded companies:

1. The Brink’s Company includes the businesses of Brink’s Inc., the world’s premier provider of secure transportation and cash management services. The company has approximately 54,000 employees at operations in more than 50 countries, had 2007 revenues of approximately $2.7 billion and operating profit of $223.3 million.
2. BHS, which has approximately 3,600 employees, is one of the largest and most successful residential alarm companies in North America. In 2007, BHS had revenues of approximately $484 million and operating profits totaling $114.2 million. BHS operates in all 50 states, the D.C. and several markets in two western providences in Canada. BHS’s ability to provide an outstanding customer service experience as awarded by J.D. Power and Associates, has created a loyal customer base that includes approximately 1.2 million systems under monitoring contracts. Through its dedication to high quality customer service, BHS maintains one of the highest subscriber retention rates among major residential alarm companies.

Brink’s also reached an agreement with activist hedge fund MMI Investments whereby one of their nominees will be supported as a director at the 2008 annual meeting while another director of theirs will be nominated at BHS following the spin-off. In return, MMI has agreed to withdraw its request to nominate any directors at the next annual meeting. Combined, these events represent yet another victory under the belt of activists and should result in substantial value creation for shareholders that many estimate as high as 40% to 50% premium. These factors make BCO a stock that is definitely worth following over the next few months!

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