Red Hawk buys NES, NNS
DENVER--Red Hawk Industries, a systems integrator specializing in the financial market, announced in January the acquisition of New England Security, a firm with more than 30 years of experience in bank design and construction. Red Hawk did not disclose terms, but confirmed it had acquired 100 percent of NES stock. Just a week later, Red Hawk announced the acquisition of National Network Services, a network security provider. Again, no terms were released.
"It gives us more reach into the Boston area, New Hampshire and Vermont," said Greg Johnson, Red Hawk's president and chief operating officer, of the New England buy. NES, based in Taunton, Mass., also has a strong foothold in the eastern Connecticut market, Johnson said.
NES and NNS represent Red Hawk's 15th and 16th acquisitions in just six years since the company's inception in 1999. NES and NNS will, like many of Red Hawk's purchases, retain their management structures and brand identities.
Allied Capital, which provided Red Hawk with $41.5 million in financing at the beginning of 2005 for purchases that included integrators BVI and FiSource and disaster recovery specialists MPA, also financed these deals.
Johnson cited NES's "pristine reputation in the marketplace" and smaller, local bank clients that get at Red Hawk's "sweet spot" as deciding factors in the deal. Further, he noted that NES has a customer-service kiosk line of offerings that Red Hawk could market to current banking customers.
As for NNS, the company allows Red Hawk to provide its customers with data security for the first time.
Perhaps most interesting, however, is the New England Security division not included in the deal, called the NES Group, which focuses on bank construction and will now be a partner in a co-marketing agreement than can be leveraged throughout Red Hawk's holdings. Gregg Rosen, president and partner with the NES Group and former president and partner in New England Security, said he can now focus his "entire efforts on the growth of NES Group and allow the NES division to grow under the leadership of Red Hawk...NES Group now has the opportunity to, well I won't say go national, but it gives us the ability to consider future expansion."
As NES Group gets in on the ground floor with bank construction, starting as early as site acquisition and architectural design, Red Hawk can now be in on the ground floor as well.
Johnson also indicated that Red Hawk was ready to start looking at other vertical markets.
But the focus will remain on the financial sector. "A lot of the larger financial institutions are looking for alternatives to Diebold," Johnson said (see related story, "Weathering Bad Press").