Guard consolidator makes its mark

New holding company enters the market, eyes more acquisitions
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Wednesday, June 1, 2005

HOUSTON--A newly formed holding company plans to make its second acquisition in the security guard market by the end of June, a deal that would provide it with a stronger reach in the commercial guard industry.
Safeguard Security Holdings released few details about the business it plans to buy, but said it is an East Coast security guard company with more than $13 million in annual revenue.
"The new business will give us a different geographic market and it's 100 percent commercial," said W. Brown Glenn, chief executive officer of Safeguard Security. Glenn declined to release the name of the company, citing concerns over competitors poaching customers and disrupting employees.
The acquisition is part of Safeguard Security's goal to build a security guard firm with $100 million in business with no more than 30 percent of its work coming from the government market. Currently, 90 percent of its contracts are government.
Consolidation is an ongoing trend in the guard market, according to Robert McCrie, professor of security management for John Jay College of Criminal Justice in New York. For consolidators like Safeguard Security, bringing several guard companies together can help a company increase guard hours, but lower overhead costs.
"You don't need to duplicate payroll, you can reduce training, central office costs for scheduling and bring the acquisition under the same liability insurance for additional money but less than on its own," said McCrie.
For Safeguard Security, once it completes its planned purchase of the guard company, it would mark its second acquisition. Its first foray in the guard market came in November 2004, when it bought Superior Protection, a $23- million per year company with clients in Texas, Florida, Pennsylvania and Hawaii.