G4S president talks integration strategy

With NSSC, Adesta, and Touchcom in the fold, what's next?
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Thursday, July 29, 2010

PALM BEACH GARDENS, Fla.—News last week that G4S had purchased Nuclear Security Services Corp., an integrator and manufacturer serving the nuclear facility marketplace, should not have been surprising. Coming on the heels of purchases of integration firms Adesta earlier this year and Touchcom two years ago, G4S, touted as the world's largest security firm, is clearly interested in the high-end integration marketplace.

But why?

"It's not that we're acquiring to dominate the systems integration space," said Drew Levine, president, G4S Secure Solutions—North America. "If it works out that way, we're certainly not going to argue with it. But we have such a large customer base through our manned guarding and we're looking every day for opportunities to enhance our offering to those customers."

Essentially, he said, the integration and high-technology capabilities will help G4S further establish itself as a trusted partner with its customers, rather than having to play in the commoditized space where every customer is just a lower bid away from being an ex-customer.

"We feel we need to bring more value to the customer beyond the staffing of the positions and how successful we are with that," Levine said. "If that's all we're doing, then we're only as successful as our last shift ... We want to be a whole lot more than the officer at the gate and patrolling, and we want the systems we install to complement what we do."

He noted, for example, that NSSC's genesis was as a consulting firm that exposed weaknesses in nuclear facility security systems. Eventually, these facilities began throwing up their hands and just having NSSC design the system they couldn't beat. Now, "they have product in just about 100 percent of all nuclear plants in the U.S.," Levine said. "It's not just about the perimeter protection, or the CCTV systems or the alarm system. It also reduces the cost from the labor side, and that's our pitch back to the nuclear community—along with the government, commercial sector, and other verticals."

Levin acknowledged that this move to pair guarding services with technology services is a growing trend in the industry—Security Systems News has reported on similar plans and approaches by Andrews International and Universal Protection—but said G4S was out ahead of the trend. "I think we're the pioneers of this," he said. "We developed a robust handheld device that's done really well for our employees and customers," he said by way of example. "Then, immediately our competition came out with their version of it."

Why does this trend make sense, and why does it offer competitive advantages over pure-play integration firms? "Guard providers never want to give up revenue, and systems integrators don't want to give up intellectual property to the guard provider, and the customer has to purchase access, CCTV, and all the rest of it separately. And then they buy the service to operate these systems and the different tiers of guarding they need. Our approach is to integrate these organizations into G4S North America and have a service offering at all levels that goes beyond the reach of manned guarding and goes beyond the technology.

"And that's the skillful part of it. Are we trying to be the biggest systems integrator out there? We're not. But if it works out that way, that's fine. We want to create value not only for G4S, but also for the customer. We want to be a known trusted partner. These acquisitions are examples of those moves."

"Within two years we've acquired three organizations that we think add quite a bit of value to G4S," Levine concluded. "And we're still going to look for more organizations. We're not finished."