Australian Investment firm Allco Equity Partners Ltd will buy electronic security provider Signature Security Group for A$145 million ($159 million).
AEP managing director Peter Yates said Signature, the third largest seller of electronic security services in Australia and New Zealand, had significant potential for growth.
"This is an excellent opportunityfor AEP, consistent with our mandate to invest in businesses with stable cash flows, which has opportunities for expansion through both acquisition and internal growth," Mr Yates said.
"The security market offers opportunities to acquire customers and consolidate existing businesses."
AEP said it would partner with Signature chief executive Howard Watson to buy the company from a group of private investors.
The acquisition will be partly funded through A$40 million in equity from AEP's cash reserves as well as A$105 million in mezzanine financing to Signature from one of its main shareholders, AMP Capital Investors.
"The acquisition will result in approximately A$120 million of intangibles being brought on to AEP's balance sheet," the company said.
"The implications for AEP on its monthly NTA reporting will be addressed in a separate release."
Signature leases and sells electronic security equipment to residential and commercial customers.
Mr Yates said the electronic monitoring segment of the security industry is forecast to grow at rates in excess of gross domestic product (GDP).
The company's senior executives will stay on with the business after the acquisition, which is expected to take place in the next two weeks.
Earlier this month, AEP also made a A$275 million takeover bid for paint maker Wattyl Ltd.
