KRG Capital invests in Convergint Technologies

With cash infusion, Convergint is on acquisition trail
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Wednesday, September 19, 2012

SCHAUMBURG, Ill.—Convergint Technologies will look at “acquisitions that would complement [its] strong services focus and IT security capabilities” as the result of a new investment, announced Sept. 17, by KRG Capital, Convergint CEO Dan Moceri told Security Systems News.

With reported 2011 revenues of $237 million, 1,100 employees and 26 offices around the country, Convergint is one of the nation’s largest systems integrators. KRG Capital—which is based in Denver and made this investment from its $1.96 billion Fund IV—does not appear to have other investments in the security industry, though it did invest in a life safety company, East Coast Fire Protection Inc. of Richmond, Va.

Asked about the structure of the deal, Moceri said that Convergint has had a variety of strategic partners, equity partners and traditional debt during the past 11 years. “In all of these relationships, Convergint management has retained a significant ownership in the company. This continues to be the same today with the KRG investment,” he said.

Convergint offers security, fire, building automation and health care technologies. Moceri said security is the largest and fastest-growing segment, and the company expects to boost growth with this investment.

“Since 2002, we have built strong IT skills and see a significant opportunity to expand our electronic physical security business to include more solutions on the logical side of security,” Moceri said. “We see opportunity in the marketplace as the convergence of logical and physical [security] continues to evolve for a combined offering.”

Fire is Convergint’s second-largest business. Mass notification has good growth potential, he said. “We still see this business in its infancy and expect to put more resources to grow that aspect our business,” he said.

Across the portfolio, service is “the catalyst for growth. This investment will allow us to deliver even higher levels of value-added services,” he said.

What are those services? “They go far beyond break-fix type of service,” Moceri said. “With many of our strategic accounts, we actually embed Convergint colleagues in their accounts. Many are program managers [who] assist our clients in developing their security programs. We then help them define projects and budgets.”

Convergint helps businesses “optimize performance including database management and backup, contingency planning, and integration services to bring together disparate systems that can be found throughout many large corporations,” he said.

The company also bar-codes “all devices and creates a historical record of devices and their performance and makes that available online for our clients,” Moceri said. He said Convergint’s customer service portal shares the company’s  performance results against the agreed-upon client terms.

“At any point in the relationship, our clients can access real-time reports that clearly demonstrate Convergint’s performance,” he said. “These are a few examples of the value-added services Convergint provides.”

Convergint has offices around the United States and Canada, but Moceri said there “are still market areas we will expand to including Boston, Philadelphia, St. Louis, and Toronto, to name a few.” Further expanding its footprint will enable Convergint to “provide more local service, particularly to our strategic account [national account] clients,” he said.

Convergint has been an IT-centric integrator for a decade. “We jumped on the IP camera business very early on in 2002,” Moceri said. “Since then we have built robust IT capabilities. We see network-based skills as table stakes in today’s IP-based security business.”

Through high-level integration, Convergint seeks to help its customers “lower their operating costs, meet regulatory requirements and keep their people and assets safe,” he said. Convergint’s capabilities include “systems architecture, database knowledge and integration and scripting skills. Using these skills, we can integrate video data and card access data into our clients’ enterprise business systems,” he said.

Last year, Convergint partnered with guard firm Securitas to offer more services to its customers.