Infrastruct acquires Monarch, Kimmons' accounts
HOUSTON--Infrastruct Security, an integrator operating in the Gulf Coast region, announced in December the acquisition of Monarch Security, along with the accounts of Kimmons Security Services. Terms of the deals were not disclosed, but Infrastruct expects the additions to bring in annual sales near $10 million, resulting in $15 million in 2007 sales for Infrastruct, with monthly recurring services revenue at roughly $75,000.
Following Infrastruct's July 1, 2006, landing of $4 million in funding (see "Infrastruct lands," in the September issue of Security Systems News), Monarch was an early target for acquisition, said vice president of marketing and sales Andrew Wray. Monarch's accounts are entirely commercial in nature, with 80 percent falling within the critical infrastructure vertical, Wray said, and "part of our original venture strategy was for us to take a more dominant position in the critical infrastructure market through acquisition and organic growth."
Dan Weiss, Infrastruct's president and chief executive officer, said it's not just critical infrastructure his company is looking at, but more specifically what he's calling the "regulated security market, the new areas of electronic security and consulting that are being required by the government" through the Chemical Security Act, the Port Security Act and provisions in other homeland security bills. "It's the first time," he said, "people are being required to do something with electronic security. That's the piece of the critical infrastructure market that interests me."
Kimmons wasn't as targeted as Monarch, but "was the right thing to do at the right time," said Wray. The company was looking to specialize in investigative services, he said, and "we have an acquisition team in place that looks for opportunities. Kimmons was looking for a similar opportunity and so a deal was struck." Kimmons has a strong base in the water distribution and treatment market and will continue to sell accounts that will then be turned over to Infrastruct.
This new account base will benefit, Wray said, from the company's nearly-complete central station, expected to be fully operational by February.
The new station will also make it easier, Wray said, to integrate acquired accounts into the business. This will be important going forward, as Infrastruct is actively seeking acquisitions, Weiss said. "We are winding up to do about a $20-to-30 million round of equity and debt funding in Q1," he said, "to make other acquisitions in the south-southwestern market, to expand into Oklahoma, maybe Louisiana." He said he'd love to hear from interested integrators.
"We're not looking to steal any businesses," he said. "We're looking to build something with other entrepreneurs. We happen to be well-capitalized and we plan on disrupting the market and being a dominant player."