Devcon adds two as it grows in Florida
DEERFIELD BEACH, Fla.--After acquiring two security companies in Florida, Devcon International stepped closer to being one of the largest players in the state.
In mid-November, Devcon snagged Guardian International, a provider of electronic security services and monitoring for the residential and commercial markets in Florida and New York, for $65.5 million in cash. The same week, Devcon also bought Coastal Security Company, a full-service firm with monitoring, for $50.4 million in cash.
The two mergers grant Devcon's portfolio combined recurring monthly revenue of $3.8 million, and add more than 92,350 customers to their existing base, according to a press release.
The acquisitions for Devcon are a continuation of its strategy to expand its position in the industry and propel the company to be a top contender in the Florida market, said Stephen Ruzika, president of Devcon Security.
Adding Guardian will also increase opportunities outside of Florida, such as the tri-state area of New York. That area is home to Guardian's second monitoring center, as well as its sales and service offices.
Guardian's New York City operation is a very attractive property, said Jack Mallon, managing director of Mallon Associates. Mallon noted that the company had alliances with construction firms as it worked in the commercial space. According to the press release, Devcon will merge Guardian's 32,500 third-party and 8,000 proprietary customers.
Serving commercial and residential markets, Coastal will provide Devcon with more than 165,000 customers. Sheldon Katz, president of Coastal, with be vice president of Devcon's security division and will oversee the company's Boca Raton-based monitoring center.
In January, Devcon purchased Adelphia Security from Adelphia Communications for $42.8 million. Only months after the purchase, in June the company sold off the Buffalo, N.Y. portion of Adelphia's accounts to Amherst Alarms of Amherst, N.Y.
Ruzika declined to comment about plans for the Northeast market.
"It [the tri-state market] gives us the platform if we want to go down that path," he said.
However, Ruzika's vision for the company is to "take a strong position as a local and regional player."
Harold Ginsburg, president and chief executive officer at Guardian, said joining forces would create an enterprise well positioned to compete in the East Coast security markets. Ginsburg declined to comment on the reasons for selling his company.
Devcon made a $3 million deposit toward the cash price agreement and the deal is expected to close in March 2006.
A publicly traded construction firm and distributor of ready-mix concrete, Devcon International entered the market in 2004. It secured $18 million in financing and purchased Security Equipment Co. for $4.5 million.
These purchases show that the alarm market is still alive and percolating, said Mallon.
John Mack, president and chief operating officer of USBX advisory services concurred, "It makes a lot of sense for both parties. They will have a larger regional presence on the East Coast and a very good management team."