Allied Universal Acquiring G4S to Become $18 Billion Company
Allied Universal, the largest security services company in North America, is planning to acquire G4S, a larger British competitor, to create an $18 billion goliath.
In this report, IPVM examines the deal, including:
- G4S and Allied Universal Financials
- Allied Universal growth
- Allied Universal ownership and deal financing
- Opportunity for international expansion
- Growth and position in North America
- Allied Universal CEO's comments on technology interacting with manpower
- Security integration and guarding
- Challenges for security guard business
- Technology vs Guards
Revenue *** ******
****** ********* ** ********** *** $*.* ******* *** ** cash *** ***. ******, *** ******** ~$**.* ******* *** in ******* *** ~$*** ******* *** in ******** *****. ******** ***** *** moderately ***** **** *** **** *** years, **** **% ****~$*** ******* *** ** ****** ~$*** ******* *** **** ****.
****** $*.* ******* *** ** ** line **** ****** ******** ******, ** reported ** ***** ******** ***** ************* *. ***** & **********(****), * ****** *** ******* ****** guarding *********. ***** ************ ** *** past * ***** **** **** ~** - ** ***** *** ******’* ******, reports ****.
****** ********* *** $* ******* *** in **** *******, ******* **% **** 2016 (~$*.* ******* ***) **** *** company *** ***** *********** ********* ******* ******* ************ ******** *** ********* Protection *************** * $*.* ******* ******* ** that ****. *** ******* *** ** Allied *********,***** *****, *** ********** *** *** ** Universal ********** *******, ***** *** ***** as * ********** ******* ****** ********* security ********.
****** *********'* ***** **** *** ******* ****** * ******* **** ******** revenue **$** ******* ***.****** *********'* ******** ***** **** **** 3x **** ~***,*** ********* ** ~***,*** after *** ***********.
****** ********* *** ***** ***** ******* to ****** * **** *****:
******** ************* ** ******** ** ** sent (** **** *********) ** ******** G4S ************ ***, *** *********** ********, to ******* **** *********** ****** *** to ************ ** *** *** ***** Schemes ****** ** **** ** **** Announcement.
Combined ******* ******* ***** ***** ***** *******
****** ********* *** ***'* ******** ******* of $** ******* *** ***** ************* outsize *** ***** ********* ******* ******* in *** ******** ***** ********. *** other ****** *******, ********** ** ****'* ***** *****, ****************($**.* ******* ***),********($*.* ******* ***), *************($*.* ******* ***).
**** ****, *******, ***** ****** *** "rise ** *** ****** ******** *****-************ - *** '*** *** ** ****,'" powered ** "******* ********* ********** *******, fueled ** ** ****** ** ******* equity,"**** **** ****** *********** **** ******* ** * corporate ******** ********. ***** ******* **** become **** ****** ** ******* ****** slows ** *** ******** ********, **** shares:
*****'* *** * *** ** ******* growth ** *** ******** ********. ***** security ** * ********* ******** **** enjoys ******, ****** ******, ***** ** rarely *** ******* ******, **** ***** is *** **** *********. *****'* * point ** ***** ********* ***'* **** anymore, *** **** *** **** **** by ******** ****.
Allied ********* ********* *** **** *******
****** ********* ** ********* ***** ** a ** ****,******* ******, *** * ******** ******* ****,****. ********* ** ***'* *********** ****:
****** ********* ** ***** ** ***** controlled ** ******* ****** *** (“Warburg ******”), who indirectly hold a 43% interest, and a fund managed by a wholly-owned subsidiary of Caisse de dépôt et placement du Québec (“****”), ***** ********** **** * **.*% interest, *** ******* ***** *********, ********* an ********* ** *** *. ***** Group.
**** **** **** ** ****** ******* debt *** ****** *********, ******** ** Warburg ******.
G4S ***** ********* *** **** **********
****** *********'* ***** ** * "**** price," **** ******** ***** ******* **** *******. *** ***** "***** ** ***** more **** *** ****** ****," *** "there ** ** *********** ***** ******* management's **** ***** ****** ** ********." G4S *** ******** * ****** ** high-profile ******** **** *** **** **** years, ********* ****** ** *** *$** ******* *** ******* ************ *** ** ********** *** electronically ********** *********. *** *** **** the ******* ** **** ***** ***************** ******** *** ********** ** ****** guards **** ******* *********.
Allied *********'* ************* *********
* *** ****** ***** *** **** acquisition ** ** ***** ****** ********* to * "****** ************* ********." ***** Allied ********* *** ********** ******** ***** ** ***** *******, ************, *** **, ******, ******, Honduras, *** *********, ** *** ****** international ********. ** *** ***** ****, G4S ** ****** ** ** ********* and *** ******** *******, ********* ******, the ****** ****, ****, *********, *** Africa. ******** ** ***** ******** ******* like ********* *** **********, *** *** a **** *********** ****** ********, ************ in ******, ****, *** *********. ********* G4S **** **** ** **** ****** Universal's ***** **** *** ************* ****** since *** ******* *** *********** ******** and *********.
***** *******, ********* ********** ***********, ***** ******** *********, ********, *** consulting ******** ** *** ******** ********,********** *** *********** ** *********, ***** be "**************" *** *** ********:
** ** ***** *******, *** *********** would *********** ****** ****** **, ** far, *** ******* ****** ******** *******.
**** *** *** **** *********, ****** would ** **** ** ******** *** enhanced ****** ******** ** ***** ****** margins ** *******, **** ************ *** globally, ***** ***** ** ******* ***********; but, ** *** **** ****, ****** an ******* ** ***** **** ************ in ***** ** ********** ******* ******.
****** *****, ********* ** ****** *. ***** & **********, **** **** **** *********** could ***** ****** ********* ************* ** that ****** ********* ** **** ** provide ******** ** ********* ***** **** previously *** *** **** *** *********. This ***** ******** ******* *** ****** Universal *******, **********, ****** ********* ***** have ** ****** ** ****** *********** out *** *** ** *** *******, local *********** **** **.
North ******* ****** *** ********
*** **** ***** *** ******** ********* for *** ******** ******* ** ***** America ***** ****** ********* ********* *** no ********* ******* ** *** ******. The ******** ******* **** ** **** to **** ** ***** ******* ** general ************** ********, *********** ******* *********, insurance, *** ********** ********. *** **** also ** ******** **** ***** * public *******, ***** **** **** **** costs **** ********* ******* **'* ***** publically ******.
****** ********* ******* *** *** ******* security ***** ** ***** *******, ** a ****** ** ******** ** ********** over *** **** * *****, *** G4S's ********** ********* **** **** ** more ******** ************** ** ***** *******. Allied ********* *** ***'* ******** *.* revenue **** ** ~$** ******* ***, which **** ** **** **** ** the **** ******* ** ******** ** terms ** ******* ($* ******* ***), Securitas, ********* ** ****'* **********. ****** Universal ********* ******** ******** ******** *** companies **** **************** *****, *** ****** ** ******,*** **** *************** *** *****-** ******** ** ******** is ****** ** ********* ****.
*******, ***** ****** ********* ***** ** dominant ** ***** *******, *** ***** size ***** ********** ** ******** **** smaller ******* ** ****** **** *** more ************, ******** *******, ******* ********. He **** ******** **** **** *********** might **** ** "******* ********* ***** created ** *** ***** *****" **:
******* ******* ***** **** **** ** appreciable ****** ** ********* ***** ** let **, **** ** **** **** start ******* ********* *** ****** ** whom **** ********* ** ******** *****.
Challenges *** ******** ***** ********
**** ******* **** ***** **** *** security ***** ******** ******* ******* **** increases,********** ********** ****, *** *********** ** *** ********** Care *** (***), ********'* ***** *****. * ***** ******* *** **** drive ***** *******. * ******** ******* wage ******** ** $** *** **** would ******** ******* ***** ** ********* and ***** ********* "** ****** ***** billable ***** ** ********* **-**** ******** officers ********** *** ******* ** **** electronic ********." ******** ********** ******** ********** scheduling *** ********* *** *** ***** also ***** ** ***** *** ******** guard ********* *** ***** *********.
"Technology ********* ** ********" **** ****** ********* ***
***** **** *** *** ** *** technology ** ******** ******** ******** ** the ****** *** ***** ******, ***** Jones, *** ** ****** ********* **** in* **** ********* **** ************* ** ******** "********** **** ** augmented ** ********." "******* **** ** on *** ****** ** ******* ** the ***** ********* **** *****," **** Jones. *** ****** *********, ********** **** not ******* ******** ******* **** ******* businesses **** **** ** ** ****.
*** ******** ***** **** ** *********** between ******** ******, **********, *** ****, too, ** ********* ** **** ***** from ******* ******** ************:
*** *** **** ********** *** "********** ******** ********", ***** *** ********* ******* ** 3 ********** ****** *** ******* *** contract *** **** **** *********** ****** contracts.
******* ****** **** **** ****, ******* IPVM, "**'* *** ***** ********** ******* with ********. **'* *** *** ** the *****. ** **** ***********, ******** companies **** **** ** **** ****." Still, ************* ******* ** *** ** Oringer ****:
******** ******* ** *** ******** ***** industry **** ********** ***** **** ** provide ********** ************* ********** **** ** more ********* ***** *********, ******** ********** centers *** ****** **********, ******** ***********, and ********** ********. ** **** ******, the ****** ********* ****** **** ** a *** **** ****; *** ***** outside ********* ** ******, ******** ***** companies *** ***** ********* *** ***** utilize ********** ********* **** ******* ****** specialized ******** **********.
Enhance ****** *******
****** ********* ** **** ******* *** investments **** *** "******* [****** *********'*] margin *******," ***** **** ** *** Bloomberg *********. ** ******* ********** **** this ***** ********* **** **********-******* ********* that *** ******** ******* *** *** company, ****** **** ********* ******* ** labor ********, **** ******** ******** ******. Although ** ** *** **** ****** Universal's ******* ******* ** ** *** publically ******, ***'* ******** ***** (******* ** ****) ******* **** ~*.*%, ** ****** Universal's *** ****** ********* ***** ** that. ***** *** *** *******, ***** could ** ****** ** ******* ******-****** technology.
******** ***** *** *** ******* ************ expansion ** * ***** ** ********** margins, **** ******** **** "************* ***** leaders **** *********** ******** ****** **** the '******** *******' ****** ******* **** margins ** *** **%-**% *****." **** shows *** *************** ** *** ** market, ***** *** ******* ** ~**%. It ** ********, ****, **** ****** G4S's ********** ** ******** ******* **** enhance *** ******* ****** ******* ** Allied *********.
Cross-Selling ******** *********** **** ********
****** ********* *** *** **** **** individually **** ******* ******* *********** ********** into ***** ********, **** *** *********** their "********** ******** ********", ******** ******** ******** ******** *** security ******* *********** ****** **** **** traditional ****** ********. ****** *********, ***, has ********** ********** ******** ** ********* 4 ******* *********** ********* **** *** last * *****, **** ******** ******** of ~$*** ******* ***, **** ********. Indeed, ****** ******* ***** ***** **** are **** ************* *** **** * trend *** "****** ********* **** ***** derive * *********** ******* ** ******** from *********** ******** ******** ******* ********," says ****'* ******** **********.
******* ********** ******** *** ************* $*** ******* *** ** ******* ***, ***** ********** **** **** 10% ** ******* *******, ******* ***. While ** ** ******* *** *** the ********* ******** ******* *** ** in ***********, **** ** ********* * service ****** ********* *** *** **** both **** ******* *******.
*** "*** * **** **** ****** technology ******** **** ****** *********, ** G4S *** **** ********** *** ********* for **-** ***** ***** ****** ********* started **** ** *** **** *** years," ***** ****** **** ****. *******, G4S ** *** * ********** ****** and *** ********** ********, **** ** AMAG, *** ******* ***********, ** ****.
Challenges *** ******** **********
* *** ******** ** *** ****** security ***** ********* (********* ****** ********* / ***) *** ****** ** ********** providers **** ***** ********** *****. ** the **** ****, ***** ********* ********* see *** ****** *** *********** ** deliver ********** ********** **** ********. ** the ******** ****, ***** *******'* **** skill **** *** ** ******** ***** numbers ** ******, *** ********** *********** so ** ***** ** ********* *** them ** ********** *** ******* ** the ********** ****.
***** **** **** ******** **** *********** and **** **** ********* (*.*., *** and ****), ** **** *** ** see **** **** **** ******** ** the ********** ****. **** ******* *** trying (*.*., ************ ************ **** ***********) but ** ***** ******* ** ** seen ** **** *** ************** ****** hundreds ** ********* ** ****** ***** developing ** *********** **********, ** *********** to **** ******* *********** **** ** Genetec ** **********, ** **** * few.
**** *** **** ******, **, ******, and ****** **** ****** *** **** commonly ****, ******* ********* **** *** net ****** ** ******* ** ***** services. *** **** *** ** **** ways, ** ******, ** ** ** determined. *******, *** **** ******** ********** becomes ** ****** ********* *** ********** to ********, *** ***** ****** *** having ***** ** ****** *******. **** could ***** ******* ******** ******** ** the ****** *** ***** ***** ********, clearly *** **** *** ******** ** these **********.
Vote / ****
** ***** ******** ********** *** **** paid ** *** *****, ** **** the ******** ******* ***** *** ***** change ******.
**** ** **** ** *** **** a ******** ** ********* ****. * have **** **** *** ****** **** with *** ***** ******* *** *** paying $**/** *** * ***** *** $35/hr *** * *******.
** **** ****** ** *** ** paying * *************** ****** $**/**** ** "guard" ****** ** ****** *** ****** value **, ** * ******* ********. they **** *** ****** ***** *** place ** ******** *** ****, **** act ***********.
** **** ****** ** *** ** paying * *************** ****** $**/**** ** "guard" ****** ** ****** *** ****** value **, ** * ******* ********. they **** *** ****** ***** *** place ** ******** *** ****, **** act ***********.
******. *** *** ** ** ******** practice ** *** ********** ******* ********.
***** ********. * **** ** ****** a ***** ******* **** ** * past ****, * ***** ** ******* on *** ********** ***** ** **** as * ******** *** **** ** a **** ** *** ** **** retraining *** ** **** ******** ** staff ** **** ********. *** ******** take ***** ******, ***'* *** *******, and ****'* ********** ******** ** ***** shorts *** ***** ******* ************.
** *** *** ** *** *** though, ***** ********* ***'* ** **** any **** ****, ** ******* ****** needs ** ** ** **** ** work */ ****** ****** ** ********, or *** ** *** ******** *****'* representative. ***** **** ** **** ********** that ***'* ***** ********** ** *****, run **** ****, ** **** **** stairs, **** **** ** **** ** an *****. *** *****...*** ** *** always **** *** *** ** *** horizon *** **** *** *** ******.
*******, ******!
**** ** **** ***** ***** *** likelihood ** **** ** ***** ********* shifting ** *** **** ******? *** sure, ****** **** ** ****** *** what ***** ******** ***** *****. *** Ala *****, * ***'* **** *** many ****** **** **** *** *** do *** ***** **'* ********* **** they **** ****** ***** ***** ** technology *******?
*** ****, *'** *** *** ******** company ** * *** **** *** your *******. **** * ******* ***** in ****, ** *** *** ****** on *****, ******** *** **********, **** of **** ********* ***** **** *** occasional ****** ******.
$*** *** ** ***** *****, *** guard ***** ******* ** **, ******** time *** *** ** */*, *** all ******** ********** **** ***** ********* by ***** *** ** *** ******* in **** ****. ** ***** *******, the ****** **** *** ****** ** around ****. *** * *** ****** on **** ***.
*** *** *****, ******* ****** *** be ****, *** ****** ***** **** to **** *** ******* *** ** a **********. * *** ***** ******** director *** *******/******** ***** *** * few ***** *** **** **** * very *********** ******* *****/******** *******. *** environment ***** ** **** ****** ** be ****** ******* **********, *** **** should ** **** ** * ***** multiplier ********** *** *********.
*** ****** ** *****... ** ***** later, *** ***** ***** ******* ** 36
***** ****! *******, ** ****, *** thing * ***'* **** / ********** is **** *** ******* ****** **** of ******** ***** ******** **?
* **** **** ****** *** **** 70 ********* ************ ** **** *** growing *** *** **** *** **** growing ***********, *.*., ********* *** ************?
** ***** ****, ** **, **** each ****, ** *******, *** ****** generally ***** ** *** ***** ****** but ***** * ** *****?
*** ****, ****** *** ******, ********** in ******, ** ******** ** *** next **** ** ***. ****'** **** taken ** *** ** ***'* *********. Even ** ***** ****** *** ***** transferred ** ******, ****'* ***** **** a *********** ******* ** ***** ** hours ********** ** ********* *****. **** is *********** ** *** ***** ******** requirements **** ****, **** ***'* **** hire * ****** *** *** **** to **** *** **** ***.
*** ****** ****** *** *********** ** Hawaii ** **********, ** ** **** likely ** * ****** ** ***** before **** **** ** ******** ****** to ******** *** ********* ********* ****** to **** *** *** ***********/*** ********.
* *****'* **** *** ***** ********* successfully ******* ** ****** *********** **** in ****** ****** ******, *** *'** seen ** * *** ************ ********* attempts **** *'* **** *'** **** to *** ***** ******. *'* **** that's ****, *** ***.
****,
* ********** *** ***** ********** *** replace * *****. ***** ** ***** verification ***** * ****** ** **** efficient *** ***** **** ******* * person ** ***** ****** ***. ***** automation **** ** ****** ******* ** eliminate ********** ***** ** * **** cost *******.
**** ********** ******* ******* ***** ******, you **** ******** * *** *** makes $**.** ** **** ** * security *****, ******* *** ** *** quick *** **** *********/************ ** **** by * *******.
*** *** **** *** ***** *********. What ** *** ** **** **** person *** *** ******** *** ******* a ****? *** ***** **** ** do ** * ********* ****** **** is ******* *** ********? *** ***** need * ****** ******* ****** ****** those *****, **** * ****** *** and ********* *****.
* *** *** ********** ***** ****** away *** ***** *****, ********* **** useful *********, *** *** ****** ******** will ** ** * ****** ******* and ****** *******. *** *** *** technology ** ****** *** ***** ** stuff, *** ******** ********** *** ** deal **** **.
* *** **** **********, ***** *** better ******* ****** ** *** ******.
“*************” ** *** *** ****.
** *** ****** *** ************* *** really *** ******** ***** *********, **** Allied *********.
******** ** ************** *** ********** ***** police *********** *** ** ******* *********, and ***** *******. *** ******** **** demand “********”. * ***** ******** *** the ***, *********** ********** **** ** “privatization” *** ****** *********.
******: *** *****; ******* ******** *****
*** ******** **** ****** “********”. * quick ******** *** *** ***, *********** transition **** ** “*************” *** ****** Universal.
*** **** ***** ******** ***?
**** ********… **** **** ***** ******** with ******* ******** **** ** ******* “services”. ***** *** ******** ** ******* taxes, **** ** ******. ****** ************ of ********, ********* **, *** *********** by *** ****** *****. ** ** informally ***** ** “*************”.
***** ********. * ** ***** **** with *************, ** ***** *** * significant ******** ** **** *** ***** versus **** *** *******. *** ******** is **** **** ******* *** *** safety *** ******** ** ***** ********. Great **** * *** *** * guards *** *** ***** ** *** officer, *** ** **** *** *** as ********* ** * ****** *******, what **** ** **?
******, **** **** ***.
** * ********, ************** ** *** Angeles ********* ******** **** *** *** Angeles ****** ******** ********** *** *** enforcement ******* ** ****** ***** *** police *****.
*** ****** ** ****** ****** **** Private ******** ** * ***** ******, so **** ****** **** **** ** be *********.
***** *****, ******** ***** *** **** taking ***** **** ***** **** ***** see ******* ******** ********** ** ********** the ***** ********.
**** ***** ****** **** ** *** pension **** ****** ******* ************** *** facing ** *** ******.
* ***** *** *** ** ******** eight ***** *** ***** **** *** the ******** ** ***** *** ********** of *.*. ******* *****.
*'** ***** **** **** *** **** the *****, **** ******** ** ***** America ***** **** ** ************ ** Brazil *** ********* (** ******** ** guard ********, ********* ** ********* *** consulates).
**** ** *********** ** *** ** the ****** ******* ************* *** ********* or ******** ** ******* ***** ******** service *** **** **** *** ********* or ** * *.*.-***** ****** *********/*** runs **** ************* ** ******* ******* (e.g. ***).
** ******** ** “*************”, ******* *********** in *** ** *** ********** ****** could ******* “**********”.
*** **** *******, ******** ** ******** deterrent ***** *********, ********* ** ***** like ***********, ******, *************, ***, *****/****, (and *****), ****** **-****** ****-******** **** their ***** ****** ***** ******* *******. Now ***** ** ***/*********** ****** ********/ false ******, ********* ** ****% ** local ****** *********. ************ *** ***** is *** **** ** ** ****-********, all ****** *** *******. ** ***** excessive *********, *** **** * *** piece ** *** ******, ******* ****-******** can ** * ******** *******. *** has **** ** ********** ** ***** parts ** *** ***** ***** ******* response ** *** ****. ***** * good ********* ******* ** *************, **** shared **********.
*** **** ******* **** ** *** global ********* ** *********. **** **** likely **** ** **** ******* *******.
****** ********** *** ** **** ******* to *** ***** **** ** *** replace ***** ****** *********** **** '*** actors,' *** ***** ****** **** ****** stay *** **** ** ****. ** do *** **** '********' ***.
******: *** *** ********* -***** **** ****** ********* ************* ** to *********** | *** ******
** ** *********** ** *** *** convergence ** *** ******** ***** ********. I ********* **** ******** ****** ******* in ** **********, ******** ** * third ***** *******.
** ******** ** **** ****** **** an *** **** *********** *** *****. Bigger **** *** **** ****** **** it ***** ** ******* ******** ***** companies. * **** ***** **** ******** service *** ******, ********** ** *** don't ****** **** **** ******.
***** ***** ***** *** *** **** you **** **** ** ******** ********** technology ** *** **** **** **** they **** ** ****** ***** ** the ******. * *** ********** ** replace ****** ***** * ***, ***** is * **** **** ***** ** the **** ***. **** *** ****** of * ******** ********, * ******** company ***** **** **** ***** **** guard ******** **** **** * ********** solution, ****** **** *** ***** ** an ******* ************ ******* *** "***** added" *******.
** ***** ****** ***** * ** need * ******, * **** ******* with * ******** ** ******* **** the ****** *** ** ****** **** decisions. ** *****'* ***********, **** ***** insisting **** * ***** **** **** a ****** ****. ** ***** ******** stipulates *** **** **** ** *** guard, ** **** *** ******** ******* could *** ***** ****** ******. **** means **** * *** * ****** quality ********** ************ *** ******** ********, and **** * **** *** ******** rate.
* **** **** ** * ********* where * ***** * ***** *******, but *** *** *** ******* **** all ** *** ******** ******, ** they **** * **** ****, *** the ******* ******** ******* *** ********.
**** * **** ** *** ******** technology ****, * **** **** ** local *********** ******* ** *** **** options. **** ***** ******* *********, ******* technology *********, *** ***'* **** ** agenda ***** **** ***** **** **** so **** **** *** **** **** later.
* ******** *** * *********** *** some ****** ****, *** *** *** security ***** **** ** ************ ****** on ***** **** *** ***** ******** companies **** *'* ******** ****.
***** ** **** ***** *****, ****** a ****** ** **** ***** ********* some ******** ************ *** **** **** makes **** **** **********. **** ** micro *****, * ***'* *** **** a ******* ** *** ********** ****, but ** ********* **** *** ** sell *********** *********/*********. * ***'* **** that **** ***** ** ******** * can't *** ****** *** ******* ********* else.