Initial opens in Baltimore

Follows Video Master acquisition with further growth
Tuesday, August 1, 2006

BALTIMORE--Initial Electronics, the U.S. systems integration division of the UK-based Rentokil Initial, opened its fifth U.S. office here in July.
The Capital Region office will reach into Maryland, Washington, Virginia and Delaware, building business virtually from scratch, said Initial president Kevin Robison. From the outset, the office will be staffed by Vernon Rocco and Dan Starsoneck, who worked with Robison in the late 1990s at Compudyne.
"We're going to do whatever work we can," Robison said. While government work is something Initial is interested in, and Robison doesn't believe you can be a major player in the security market in the United States right now without an office in the D.C. area, the early business for the office "will be primarily the commercial side; offices, banking, health care, education, they'll be the verticals we'll be looking at."
Robison said the goal for the Capital Region office is to "be in the $8- to $12-million range [in revenues] in three years or so." That would represent major growth for Initial, which currently brings in about $30 million in annual revenues.
However, following the parent company's exit from the guarding industry, growing the electronic security side of the business is very much in the plans. "We have to do it through acquisitions to get more scale," Robison said. "Our parent company very much wants to have a major U.S. electronic security presence, and there are funds available for acquisitions. Our job is to make sure it's the right place, the right people, and the right markets that we want to be in. That's the challenge. It's easy to make bad decisions. It's easy to pay too much money for the acquisitions."
Rentokil Initial has also consolidated all of the systems integration pieces of the company into one reporting system, which "makes it a lot easier to get resources allocated around the world," Robison said.
These organizational changes will facilitate the bidding on larger multi-national jobs and the British integration arm of the company has major CCTV expertise, but for the most part "we're looking to acquire local companies," noted marketing manager Tom Murdock. "We're looking for entrepreneurs who are looking to stay within the company." This, he said, will result in an integration company they refer to internally as a "hybrid," local offices "with local decision makers who also have the resources of a global company."
An example would be the late-2005 acquisition of Video Master, which is about 80 percent integrated at this point, Murdock said. While Video Master did have some attractive clients, including the Chicago public schools, it also had a great management team that Initial largely retained. Owner Bob Weeks stayed on for three months of transition, and his sons Brian and Dave Meeks remain with the company.
How will the sell-off of the guarding arm affect Initial Electronics? Not much, said Robison and Murdock.
"We'd co-exhibit at ASIS every year," Robison said, "mostly a guard booth at ASIS, and we'd have a couple of people and some equipment there. There really won't be any impact on us."
"We had similar names," Murdock said, "but we were two separate companies and that was largely it."