HSCC buys access-control/RFID outfit SecurityInc
ARLINGTON, Va.--Consolidation holding company Homeland Security Capital Corp. announced August 23 the acquisition of SecurityInc, a manufacturer of access control solutions using RFID technology based in Milwaukee. In addition, the company acquired SecurityInc affiliates Cyberlynk, an IT support company for enterprise applications, and AAID Security Solutions, a Georgia-based manufacturer and distributor of RFID solutions.
The three companies will be merged into the newly formed subsidiary Security Holding Corp., of which SecurityInc founder will be chief executive officer.
Terms of the acquisition were not disclosed, but HSCC reported that the three companies combined for $3 million in revenues in 2005 and the new Security Holding Corp. is expected to generate $7 million in 2007.
These access control companies are not related, and will not be integrated with, HSCC's security integrator acquisition from earlier this year, Nexus Technologies Group, said HSCC chairman and chief executive officer C. Thomas McMillen (see "HSCC to increase Nexus," in the June issue of Security Systems News). HSCC has yet to close on a second integrator, Viscom Systems that was expected to close in July.
"We do separate consolidation plays," said McMillen of the seeming disparity between independent integrators and access control manufacturers. The plan is to enter fragmented portions of the homeland security market, make targeted acquisitions, and then spin-off independent companies via initial public offerings or private transactions.
The access control space is fragmented, he said, and "we liked [SecurityInc's] management team. They've built a $100 million company before with Northern Computers - a company that was founded by Joel Konicek, SecurityInc's founder. We liked his background and decided we wanted to back him."
Further, HSCC appointed on August 28 former Andover Controls president Bill LaPointe to serve as director of Security Holding, to support Konicek. LaPointe also serves on the board of directors at surveillance manufacturer CoVi Technologies.
At the end of June, HSCC reported $2 million in revenues for the previous quarter, up from $688,000 at the end of March. As of the end of August, shares of the company were trading at less than a penny on the Pink Sheets market.
McMillen said HSCC is currently looking "at a number of companies" in the integrator space, and "might to(do?) four or five acquisitions" in the RFID market.
See the October issue of Security Systems News for more on SecurityInc.