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Consolidation: The Next Wave is on Its Way Will You Be Impacted?

By Bill Bozeman, CPP
August 18, 2009

As the global economy improves, you can expect yet another and possibly the most far-reaching M & A activity the security industry has ever experienced.

If you do not think industry consolidation will have an impact on you, think again because it most certainly will. Regardless of whether you are in security sales, engineering, accounting, general management or system deployment, the new wave of consolidation will have a noticeable impact on your career and consequently your life and lifestyle.

The physical security industry has become mainstream, attracting the attention of powerful, well-established, well-financed companies that want and need to grow to keep their stockholders happy. To make matters more attractive, the M & A specialists, who tend to be an exceptionally bright group, are aware of the deep gene pool of security companies that can be acquired for reasonable multiples.

For a number of obvious reasons, security offerings in general have gone from the outhouse to the penthouse. Our industry is now on the radar of large international corporations that seek growth. Physical security is perceived as a rapid growth engine that offers a better opportunity than many of the core businesses these large corporations currently reside in.

Of course, security is made up of more than just electronic security that I happen to specialize in and the professionals I speak with claim all segments of the security industry are perceived as being growth engine opportunities. I anticipate we will see more consolidation in the guard business, the vendor community and the supporting peripherals that make our industry run on a day to day basis.

So how should you react to consolidation? How will it impact your career? How should you prepare?

Let’s begin with understanding that consolidation impacts all of us. Just because your company is not purchased by a competitor or a roll-up consolidator does not mean you and your company will not be impacted. If one of your suppliers is acquired, you will be impacted. Other examples would include your wholesale monitoring company being acquired or your favorite DVR company deciding to merge with another manufacturer. This list can and does go on and on.

The changes may not happen immediately, but things will change and your company will be impacted.
It goes without saying that if your company is acquired you are in for very big changes – ask anyone who has worked for a company that has been acquired. I speak from experience and will tell you that big changes are in store if you are acquired regardless of what opening announcements the rank and file receives from the new corporate team. The “nothing will change” and “we will let you run the company as you always have” are hollow promises that quickly fade away.

So what should you do to best position yourself? I suggest you cooperate and do not fight the process. Fighting the process is a no-win battle. Rather than expressing frustration, remorse or event disgust, get on board with the new plan. This will be your best bet in not only surviving the change, but also possibly benefiting from the changes as well.

Acquirers are very savvy businesspeople and they quickly determine who is on board and who should be thrown overboard. Your attitude and work ethic are paramount and only you control these two important virtues.

Even if you decide not to stay long-term because you find the changes are too uncomfortable, it is still in everyone’s best interest if you play the great game of business and cooperate to your best ability.

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Bill Bozeman, CPP, is president and CEO of the PSA Security Network.

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