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The AlliedBarton,Universal MergerAnd What It Means For The
Future of Small and Regional
Security Companies
There has been a lot of press recently
regarding the announcement of the
AlliedBarton, Universal merger.
H O W E V E R , V E R Y L I T T L E H A S B E E N F R O M
T H E P E R S P E C T I V E O F S M A L L A N D R E G I O N A L
S E C U R I T Y G U A R D C O M P A N I E S .
As a result,
the OfficerReports.com Team would
like to share our thoughts on the
merger
A N D W H A T I T M E A N S F O R T H E F U T U R E O F
L O C A L A N D R E G I O N A L S E C U R I T Y G U A R D
B U S I N E S S E S .
T O B A C K U P O U R O P I N I O N S ,
W E W I L L F I R S T S H A R E A L I T T L E H I S T O R Y
Steve Jones,CEO of Universal Services
Bill Whitmore,CEO of AlliedBarton
U N I V E R S A L S E R V I C E SO F A M E R I C A
Formed as a janitorial company in 1965
Expanded into the security industry in 1969,
with the formation of Universal Protection Service
Has acquired more than three dozen companies
in the last four years
A L L I E D B A R T O N
In 2004, Allied Security acquired Barton Protective
At that time, Allied’s acquisition made them the largest
American-owned contract security services company
The company currently has annual revenue of $2.0 billion
GeographicImplications
The combined company will
cover all of North America
and be able to service any
customer or client within
the U.S. and Canada.
Client Implications
AlliedUniversal will be better
positioned for the national account
market due to their increased size.#1
Client Implications
Major companies with a nationwide
presence require the nationwide
coverage AlliedUniversal now has.#2
Client Implications
Companies with multiple locations
may favor the seamless coverage
that AlliedUniversal can now offer.#3
Client Implications
Alternatively, some smaller clients might also be
inclined to move their accounts to small and regional
companies based on the belief that they may receive
more personalized service.
WORKERS
EMPLOYMENT MATTERS
U N I O N S L O S S O F J O B SB E N E F I T S
AlliedUniversal
will be able to
provide better
compensation
and benefits to
employees.
AlliedUniversal
will be better
able to negotiate
more favorable
terms with their
unions.
Many
management
personnel will
unfortunately
have their
positions
eliminated.
AcquisitionsUniversal has been extremely active
over the past few years in the
acquisition market.
WE BELIEVE THIS ACTIVITY WILL SLOW
SIGNIFICANTLY AFTER THE MERGER AS THE
NEW COMBINED ENTITY INTEGRATES THEIR
RESPECTIVE OPERATIONS.
AcquisitionsWhen they resume their acquisition
program, their focus will most likely
be on larger security companies.
SMALLER COMPANIES THAT MAY HAVE BEEN
TARGETS IN THE PAST WILL BE LESS
IMPORTANT TO THEM NOW.
Government Contracts
They have more resources than small or regional companieswhich give them the political and economic power to deal withthe bureaucracy of government institutions.
MEGA COMPANIES SERVICE GOVERNMENTS AT ALL
LEVELS TO THE DISADVANTAGE OF SMALL AND
REGIONAL COMPANIES.
Profit Margins
A s s e e n i n t h e p a s t a f t e r a l a r g e m e r g e r s u c h a s t h i s ,
t h e r e w i l l b e d o w n w a r d p r e s s u r e o n i n d u s t r y - w i d e p r o f i t
m a r g i n s d u e t o t h e p r e s s u r e f r o m A l l i e d U n i v e r s a l ’ s
e q u i t y i n v e s t o r s t o i n c r e a s e r e v e n u e a n d m a r k e t s h a r e .
A L L I E D U N I V E R S A L I S A B L E T O
P R I C E M O R E A G G R E S S I V E L Y .
In summary, where many people are
predicting the end of small and regional
security companies, we see opportunities
for those companies.
Let's makethis work.
In fact, we believe that local, regional, and small national
security guard companies will now have the opportunity
to grow organically, attract key management personnel,
and have the ability to make more acquisitions.
THANKS FOR READINGAnd A Special Thanks to Keith Oringer,
President of Security ProAdvisors
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For more information, you can reach Keith at [email protected] visit his website at www.SecurityProAdvisors.com
