Allied Security seeks IPO

KING OF PRUSSIA, Penn. - Plans to take Allied Security public is being called a bold move by one industry analyst, as the guard company looks to raise capital in today's difficult stock market. "The plan for an initial public offering isn't unique other than the fact that it is gutsy to try to float one in a very tough IPO market," said Jack Mallon, managing director of Mallon Capital. According to documents filed with the Securities and Exchange Commission, Allied Security plans to use about $80 million in funds from going public to mostly pay debt and to terminate an advisory agreement with one of the original financiers of the company. It's up to the SEC to determine whether Allied Security will become a publicly traded company. Documents filed with the SEC show that Allied Security recorded revenues of $450 million for 2001 and a client base of 1,400. The company employs more than 19,000 people, with about 18,000 of those working as security officers. The move comes as several prominent North American guard companies, such as Wackenhut, Pinkerton and Burns have been bought by European companies. That leaves Allied Security as one of the largest independent guard companies in the U.S. The company has risen through the ranks steadily over the past few years. In 1990, the company only employed about 6,500 people, but grew through a series of acquisitions that included SpectaGuard and Effective Security Systems. In 2000, Allied Security was brought into the mix, a $190 million a year business. Though the company has grown steadily, it has debt totaling $97.6 million. That amount is expected to be reduced to $77 million by using funds raised through the initial public offering. Mallon said this is not the first transaction attempted by the company. About two years ago, company officials were looking for a buyer and talked to several European companies, he said. "They weren't able to find an acquirer at the price they were looking for," said Mallon. And, Allied Security was a public company in the 1970 before being taken private by its founder, Ned Holmes. It remains unclear when the SEC could give Allied Security the green light to make an initial public offering. Regulations surrounding all IPO's prohibit company officials from commenting beyond the company filed prospectus. "I hope it gets off the ground because it's very good for the industry," said Mallon.