Bankruptcy prompts ITS guard sale
CLEVELAND-International Total Services sold its guard business to Houston company Willard M LLC, following an order from bankruptcy court.
The deal was for $4.8 million in cash for all the assets of the commercial security business, including accounts receivable and the assumption of certain accrued payroll-related liabilities.
That business unit employed 3,000 people and had more than $40 million in annual revenue, said Mark Thompson, chief executive officer of the company.
According to Willard Shuman, president and chief operating officer of Willard M, the company will invest in the commercial security division, which will continue operating under the name ITS, for "I Think Service."
Though the company generated large revenues, the overall business was heavily in debt, said Thompson, due to acquisitions the company was unable to integrate effectively. As a result, it was unable to pay its bills and remained deeply in debt. When the company filed for protection under Chapter 11, it had $26 million in bank debt.
"We really had no cash reserves to draw on, so given the bank's desire to no longer continue funding us, we were faced with the decision to close down or sell divisions," he said.
The company continues to operate without interruption under court protection. After the sale of its guard business to Willard M, the company continues to provide airport screening services and employs more than 8,000 people in the United States and United Kingdom.
AnotherÃ‚Â division,Ã‚Â the company's aviation non-preboard business, was sold to SMS Holdings of Nashville for $1.5 million.
Though some of the company remains, it may be short lived. This fall, the FAA will begin using federal employees for airport screening services and ITS's jobs could end once a transition period comes to a close.