Construction firm plans security foray
DEERFIELD BEACH, Fla. - A publicly traded construction firm and distributor of ready-mix concrete has begun the public disclosure process of its plans to buy a security company and enter the systems integration market.
Devcon International recently filed a proxy with the Securities and Exchange Commission on its plans to issue up two million shares of its stock at $9 per share. The company signed an agreement with an investment firm which plans to invest between $15 million to $18 million in Devcon, seed money that will be used to buy Security Equipment Co. The installation business is owned by Stephen Ruzika, a former chief financial officer of ADT Limited and president of ADT Security from 1989 to 1997.
Ã¢â‚¬Å“WeÃ¢â‚¬â„¢ve been looking to expand our current portfolio of business into a new area,Ã¢â‚¬Â said Jan Norelid, chief financial officer of Devcon, a company with $65 million in annual revenues and 300 employees.
Norelid said Devcon is attracted to the security market because of the opportunity for recurring revenue. He also believes it is a good fit for a public company.
Instead of creating the business from scratch, Norelid said company officials decided it was best to partner with an existing business. Ã¢â‚¬Å“As a business, you donÃ¢â‚¬â„¢t want to create a new market all yourself,Ã¢â‚¬Â he said. Ã¢â‚¬Å“It was important to find the right management team to move into this business.Ã¢â‚¬Â
If shareholders approve the investment plan, Devcon intends to tap Ruzika to run its newly formed Security Services Division.
Ruzika was unable to comment on the deal at press time, citing that DevconÃ¢â‚¬â„¢s plan still hinged upon shareholder approval.
Few details were also available on the scope of RuzikaÃ¢â‚¬â„¢s existing security business. According to a website for Security Equipment Co., the company installs a variety of security products and appears to offer services to both the commercial and residential market. It is unclear how many people the company employs or how large of a market share it commands.
Devcon has been in the construction market since its founding in 1951. A majority of the companyÃ¢â‚¬â„¢s business is in the Caribbean, where it builds marine facilities, constructs golf courses and distributes crushed stone, ready-mix concrete and concrete blocks.