TOKYO -- Sohgo Security Services, better known as Alsok, has agreed to purchase rival Hitachi Security Service, part of efforts to expand its customer base.
Alsok will acquire 90% of outstanding shares of the Hitachi group company on Feb. 1 for several billion yen. The Hitachi unit, which primarily offers security services for group companies, recorded sales of 8.14 billion yen ($71.3 million) in the year ended March 2016.
In a separate acquisition, Alsok plans to set up a joint venture with NTT Group's TelWel East Japan by Jan. 10. Alsok will put up 80% of the capital, while TelWel will provide the remaining 20%. The new company will take over TelWel's security business on April 1. TelWel offers security services at buildings where NTT group companies are housed, with the business generating 2.6 billion yen in sales.
Demand for security guard services is growing, as building construction accelerates in preparation for the Tokyo Olympics, and manufacturing businesses hire outside companies for factory security.
Alsok, the top provider of security guard services, aims for a further boost in business via acquisitions.