Devcon Security on the block?
HOLLYWOOD, Fla.—Devcon Security, a super-regional based here that has been rapidly downsizing this year after a period of aggressive expansion, could soon be up for sale.
Devcon was acquired by San Francisco-based Golden Gate Capital in 2009. Now, according to a statement that Steve Hafen, Devcon’s new CEO, provided to Security Systems News, Golden Gate is looking at the possibility of selling the company.
“Due to favorable current market conditions and extensive interest by third parties, Golden Gate is considering a sale of the Devcon Security business,” Hafen said. “The process has not yet been started and will likely take several months.”
Hafen added: “Golden Gate is pleased with the progress of the company and the current management team and will only sell if the terms make sense for both Golden Gate and Devcon.”
Devcon said it would be premature to discuss further details at this point, such as who might be interested in the company and what the sale price might be.
However, any sale would mark another major change in a company that has undergone several in the past year, including a CEO shake-up and the closing of regional offices.
In late 2010, Devcon launched a successful transformation, going from being a super-regional with nine branch offices to a national player. By the spring of 2011, it had more than 50 branches around the nation.
Then, earlier this year, the company underwent rapid turnover at the top. First, Golden Gate announced in February that former Protection 1 CEO Richard Ginsburg would be CEO, replacing Robert Farenhem. Then, about three weeks later, Ginsburg was out and Hafen, former Pinnacle Security COO, took his place.
Shortly after Hafen took the helm, he said Devcon was moving to “streamline and trim so the business functions at its highest level.” That involved closing a number of regional branches and also Devcon’s new 23,000-square-foot national operations center in Irving, Texas.
It’s not clear how many branches Devcon has closed but industry sources believe it’s more than 25.
Also in 2011, Devcon, a traditional-model security company, announced a unique shared services agreement with Pinnacle Security, an Orem, Utah-based summer-sales-model security provider that also is owned by Golden Gate. Pinnacle recently announced it had sold about 93,000 accounts to Monitronics International for $131 million. Pinnacle said it will use the money to pay off a substantial portion of its debt.