Safeguard Security acquires Citadel Security
HOUSTON, Texas--In a move motivated by relationships, geographical proximity and margins, Safeguard Security Holdings acquired Citadel Security, the company announced Feb. 21. Safeguard, a provider of corporate and industrial security systems and personnel, bought the guarding firm with $1.7 million in annual revenues for an undisclosed amount. The purchase comes just eight months after Safeguard's acquisition of integrator and guard firm Systemsgroup in July of 2005. That move brought with it $7 million in annual revenues.
Safeguard chief operating officer W. Brown Glenn said the Citadel buy is in line with a number of goals he has for the company. First, Citadel's customers, clustered in Arkansas and Texas, are within Safeguard's Sun Belt target market. Further, they are largely commercial-based, which is important as Safeguard continues to get away from the government market.
"We're trying to get away from it as fast we can," said Glenn. "The government doesn't care about quality. It doesn't make sense for us to compete on cost to get the business ... We want to be a value-added proposition, and the government doesn't do value-added."
To that end, Safeguard has been building a company that can design and integrate a solution, and then provide the guards to run it. "Most [chief financial officers], where these decisions are being made, are looking for a $20-an-hour-looking guard, but they don't want to pay more than $12," said Glenn. "The only way to do that is to hire fewer guards and have them trained on the systems to be more efficient."
Safeguard is currently looking at further companies to acquire "from Florida all the way to southern California," said Glenn, in an effort to become a $100 million company with margins at 19 to 20 percent and publicly traded on one of the major exchanges. Safeguard is currently traded on the over-the-counter market and Glenn said the company has filed a registration statement with the Securities & Exchange Commission to be traded on the OTC Bulletin Board.
Concurrent with the Citadel purchase, Safeguard is moving its headquarters from Houston to Dallas, likely in the next 90 days.
Read the April issue of Security Systems News for more on W. Brown Glen's views on the guarding industry as a whole.