Construction firm buys into the alarm market
September 9, 2004
DEERFIELD BEACH, Fla. - Devcon International, a publicly traded construction firm and distributor of ready-mix concrete, moved forward with its plans to enter the security market, securing $18 million in financing and then buying Security Equipment Co. for $4.5 million.
The early August transaction is relatively small in size, but it provides Devcon with a seasoned management team in the security industry. Security Equipment Co. serves 3,000 customers in the Florida Panhandle.
The installation business was owned by Stephen Ruzika, the former chief financial officer of ADT Limited and the president of ADT Security from 1989 to 1997, and John Danneberg. Ruzika joins Devcon as the president of its security division, while Dannenberg becomes a member of the management team.
"It wasn't purchased to be the platform company," said Ruzika. "It was purchased basically by Devcon because they wanted myself and John to join the team."
Devcon announced plans to enter the security market in May of this year. Company officials said they wanted to expand its portfolio and also tap into the recurring revenue model of the security industry.
At that time, company officials expressed an interest in buying Security Equipment Co. and hiring Ruzika to run the new security division. But the deal hinged on Devcon's shareholders approving a plan to raise additional capital. That money would then be used exclusively to build a security business.
Ruzika said the plan is for Devcon to build a strong regional company through a combination of acquisitions and internal growth.
"We've done it before," said Ruzika. "Take a look at our track record in the past and you'll be able to see what we can do in the future."
For more on this story, see the October issue of Security Systems News.