Devcon goes national
Over the past seven months, Devcon has quietly transformed from a super-regional with nine branches to a company with a national footprint and more than 50 branches across the country. Devcon has nearly doubled its employee headcount—going from 450 last October to 785 today. It opened a 100-employee, 23,000 square-foot national operations center in Irving, Texas, and hired top talent across the country to implement its new national growth strategy.
Devcon Security—which was acquired by Golden Gate Capital, an $8 billion private equity fund in October of 2009—formulated its national growth strategy in fourth quarter of 2010.
The goal is to become a national, full-service residential and light-commercial security provider with a “focus on delivering world class customer service and support to our growing customer base,” Robert Farenhem, Devcon CEO, told Security Systems News.
The company has two central stations, one here and one in New York City, and 140,000 accounts.
Last year as the company was developing its business in Florida, and Farenhem said: “We started to see that there was some real talent becoming available in the marketplace,” he said. That led eventually to the idea of “building a nationwide footprint from scratch,” Farenhem explained.
“Customers and industry talent alike have been looking for another strong national player to enter into the marketplace, and Devcon intends to meet these industry needs,” he said.
While he called it a “daunting challenge for a company to take on,” Farenhem noted that “we have the platform [to build on], and the support of a very strong owner and backer in Golden Gate Capital.”
He said that the company has already gained “the attention of top industry talent from a number of different sources who understandably are attracted to the customer service and employee-friendly culture of the Devcon organization.”
“We had made some branch manager hires in Florida that led us down a path where we hired a handful of former branch managers from the old Broadview [Brink’s Home Security].” Key corporate hires include Kristin Clark, Devcon VP of marketing, and Keith Patterson, Devcon SVP of operations, who both joined Devcon in December.
Patterson was with Brink’s/Broadview for 23 years, and served as VP of operations since 2002. Clark was Brink’s director of marketing for 12 years.
“At the end of this month we will have 52 branches up and running,” Farenhem said. In each of the markets, “we’ve started by identifying a general manager with some industry experience,” and then found an office location to lease, opened up offices, hired sales staff, and completed licensing requirements. “The strategy is to establish these branches and build them from the ground up.”
Farenhem said the company “may evaluate a dealer strategy in the future to compliment our internal growth mode.” For now though, he said, “we believe that in order to build out our platform and grow a low-attrition customer base, we are best served by growing our own branch network."
While the company has expanded rapidly in the past seven months, “much work remains in executing on our growth plan by expanding to all major national markets and by building a truly national customer base from the ground up,” Farenhem said. “2011 will be a year of tremendous growth, energy and vitality at Devcon.”
Doug Bayerd, Golden Gate Capital VP said: “Golden Gate is excited to continue to support Devcon through this period of expansion. Management has proven their ability to generate accounts with industry-leading characteristics. This expansion will allow the company to generate these same types of accounts on a national scale.”
Golden Gate Capital is also the owner of Pinnacle Security, one of the larger Utah-based summer-sales model companies. The expansion of Devcon is taking place separately from the growth plans at Pinnacle, Farenhem said.
When Golden Gate acquired Devcon in October 2009, Christopher Munday, Golden Gate operating executive, told Security Systems News that the company had major aspirations in the security space. “[The] plan here is to keep building out and ultimately to build a global, fully integrated security company. [Golden Gate wants to be] in control of everything, creating accounts, [providing] equipment, holding, servicing and monitoring accounts.”
Michael Barnes, a partner in the consulting and advisory firm Barnes Associates, which specializes in the security alarm industry and co-sponsors the Barnes Buchanan Conference, believes Golden Gate may be on the right track with the combination of Pinnacle and Devcon. “If Pinnacle can continue to parachute into markets and generate huge numbers of new accounts, and Devcon can do the same with infrastructure and a more traditional presence, that is a very powerful combination—one that should bode well for both companies, and for their owner, Golden Gate Capital,” he said.