Consolidation moves Securitas Systems buys PEI
STOCKHOLM--In its first buy in the United States since its purchase of Florida-based Premier System Solutions in April 2006, Securitas Systems announced in early November the purchase of integrator PEI Systems, based in Long Island City, New York. Terms of the deal were not released, though Securitas announced it paid a multiple of between six and nine times EBITDA, and that PEI had revenues of roughly $11.4 million in 2006.
More important than the revenues, however, was the 20 percent of those revenues derived through service contracts, said Asa Larsson, head of communications at Securitas Systems. "It fits in with the big picture," she said, "because it's in line with our desire to increase the service portion of our revenues within our American operations. When you look at the US/UK/Island sector of our business, it's 75 percent installation and 25 percent services, while in Europe it's 55/45, so obviously our strategy is to increase the service content" outside of Europe.
This goal was enough to trump Securitas Systems chief executive officer Juan Vallejo's stated goal: "Organic growth before acquisitions is the new mantra," he said in a March interview. "In all of our countries, we create great margins and cash flows, but we have no inspiration and development without organic growth."
PEI head Ray Dean could not be reached by press time, but Larsson said Securitas Systems intended to honor PEI's commitment to independent integrator consortium SecurityNet, to "benefit the customers."
Larsson also said PEI, founded in 1974, exhibited a sophistication of installation that made it attractive. "For example, they work with a leading financial firm that has been so-called enterprise connected with multiple servers running their security through their enterprise," she said. "With another firm that's expanding a global network of security, they're connecting multiple facilities worldwide. It's a good, interesting company."