Securitas Buys Diebold Security NA for $350M

I've seen some bids where customers put out RFP's that wanted to combine quard services with technology, where one (mostly guard companies) or the other would provide the technoology. Never seemed to work out. The guard companies would partner with some local integrator who helped offer the lowest cost, who would then install the cheapest equipment that the customer ended up not liking and along with giving poor service, and the next time they put out an RFP they usually ended up seperating guard and technology services. We won a bid where Securitas was being replaced, and I think a good part had to do with their partnership with an integrator having sunk them with very poor service.

So maybe now Securitas wants better control of the technology. But I doubt it would be very sophisticated stuff. Most big companies tend to be very basic and cookie cutter in their approach, like Tyco and ADT, which doesn't meet a customer's unique needs very well. So maybe a threat for integrators who are still in old school mode and don't offer high level technology expertise (like IT centric technologies or high level systems integrations).

Agreed, but they may run it as a seperate business for awhile first, in case they can't get a handle on it and decide to spin it off.

Going back as far as the early 70's, guard companies have tried to enter the electronic security systems market, saying that they wanted to be "total security solutions providers".

With few exceptions, guard company owned systems providers have performed poorly, producing mediocre quality installations, and providing less than an acceptable level of service. Usually within just a few years, the guard company spins off the systems business, saying it wants to focus on its "core competencies". I have seen this scenario repeat itself dozens of times over the last 40 years.

Managing security guard operations and managing a security systems business are two entirely different things. Treating systems engineers and technicians like you treat security guards causes talented people to flee. Executives in the guard industry are also used to predictable revenue streams and consistent profit margins. They are often baffled by the uncertainty of the systems installation business ("why did it take you 2 hours to install a camera at one location, and 8 hours to install the same camera at another location?...)

Securitas built a remote video monitoring center and has been expanding this offering.

Ironically, Securitas used to have a much larger security integration arm in the 2000s but it spun it off, then tried to buy them back in 2011 for nearly $1 billion, only to be outbid by Stanely Black and Decker.

Weird, since

Securitas’ biggest shareholders, Gustaf Douglas and Melker Schoerling, are also among the top-six owners in Niscayah, according to Bloomberg.

Which amounts to bidding on your own auction. Nice.

One interesting theme I have heard is that Diebold cut back staffing / costs fairly significantly in the electronics / integration business over the last few years. It appears now that this was part of 'Diebold 2.0' leading up to this sell off. Those actions most certainly improved short-term profitability, though as Brian mentions above, this may have damaged their ability for long-term service and may require Securitas to re-invest / increase spending to maintain revenues or be in for a negative surprise.

Securitas purchased a large share of I-Verify (video monitoring firm out of Charlotte NC) a little more than a year ago and has their eyes squarly on the technology piece. Their past deployments that we are familiar with have been largely a disaster, resulting in a large number of unhappy clients. Several are using the courts to brek contracts, etc... they use technology to leverage and differentiate themselves from their competitors. We were trapped into offering a proposal for camers and access control for a few of their clients and prospective clients only to discover they (Securitas) were offering their own proposal, just a little less than ours. Suprise!