What’s the Outlook for Security Mergers and Acquisitions?

What will 2023 hold for mergers, acquisitions and the other financial aspects of the security guarding business?

  Security Magazine sat down with Keith Oringer, Principal and Founder at the Security ProAdvisors brokerage, who compiles the list of leading guarding companies in America for this annual report, along with security industry veteran Robert McCrie. Oringer sees a number of key trends on the horizon, financially and otherwise:

  • Demand for security will continue to increase with higher crime rates, along with active shooter and workplace violence events. The sector will continue to do well even if the economy slips into a recession; it’s largely been recession-proof in the past.
  • Among three of the top firms, it’s likely that Allied Universal will continue to make acquisitions on both the guarding and technology side; Securitas will focus on technology, at least in North America; GardaWorld will make selective acquisitions to complement guarding with technology.
  • Half the market is smaller and regional companies and private-equity-backed firms have had success in the acquisitions of these local players due to the fragmentation of the market. Smaller and more local clients continue to appreciate the boutique, service-oriented feel these providers offer.
  • Larger companies will continue to try to differentiate themselves with a broader suite of services such as canine deployment, robots, AI, alarm responses and cybersecurity.
    • security Gusrd Mergers and Aquisitions
  • Demand will continue to increase for fire and life safety, where there have been a lot of acquisitions leading to consolidation.
  • Guarding has become especially important in the healthcare sector, where patients and families sometimes act out during stressful situations and doctors can be targeted.
  • Companies will continue to see an erosion at the gross margin level as workers in a tight labor market demand higher wages. An increased appreciation for private security in the wake of COVID-19 and other risks has led many clients to say, “OK, bill me the rate increase.”
  • Given the labor shortage, security companies need to realize they’re competing with Amazon and Starbucks, which underscores the importance of good pay and benefits to recruit and retain a workforce that’s become more used to working remotely, a benefit that onsite guarding can’t really offer.