Initial Security increases Southwest density with Smith Legacy purchase
SAN ANTONIO--Initial Security, a subsidiary of UK-based Rentokil Initial, announced yesterday the purchase of Smith Legacy Security, a medium-sized guard firm operating in the San Antonio area. Terms of the deal were not released, but former SLS owner Julie Smith Nelson will use the proceeds to enter the integration side of the security industry, said Leonard Courtright, regional vice president for the southwest region at Initial.
Courtright called the SLS buy a "bolt-on" acquisition, as it made for an "exact geographic and operational overlap."
Consolidation was nearly immediate, he said, with all 285 guards being retained and all overhead employees who wished to remain staying on board. "There will be an immediate service improvement," said Courtright, as Initial will now have far more people working in the same geographic space. "If [Nelson] had accounts in an area where we were not, it would not have been as attractive."
This is part of a strategy of acquisition for Initial, said Courtright, that looks for bolt-ons almost exclusively. He pointed to the 2002 acquisition of the Dallas-based Innovative Security Group and the spring 2005 purchase of OCS Security of New York as examples of the trend. Smith Legacy's customer base, which includes the city of San Antonio and Dominion Country Club, was attractive, too, said Courtright.
"We've been kind of running after them on those," he said.
Also, at $4.8 million in annual revenues, 97 percent of which came from guarding, SLS was roughly twice the threshold Initial looks for in terms of company size when making acquisitions. Initial's North American revenues are about $285 million annually. The company has 60 United States and Canadian branches, and employs more than 14,000 people.
Read comments from Initial president and chief executive officer Randal Dorn and Smith Legacy's former owner Julie Smith Nelson in the February issue of Security Systems News.