Allied Universal acquires U.S. Security Associates

CONSHOHOCKEN, Pa. and SANTA ANA, Calif.—Allied Universal, a security and facility services company based here, on July 16 announced that it has reached an agreement to acquire U.S. Security Associates (USSA) from Goldman Sachs Merchant Banking Division (GSMBD), adding approximately 50,000 employees and bringing the company's employee total to more than 200,000.

This transaction, which includes the acquisition of Andrews International, the global arm of USSA, is expected to close by late third quarter of 2018, subject to customary regulatory approvals. Terms of the deal were not disclosed.

“I am excited to welcome the USSA team to the Allied Universal family,” Steve Jones, CEO of Allied Universal, said in the announcement. “USSA has evolved into one of the leaders in the security industry over the years and provides a unique suite of security solutions to a wide array of clients across industry verticals. This transaction aligns with our long-term growth strategy of acquiring scalable businesses with significant potential when combined with the Allied Universal platform. I look forward to collaborating with the USSA team to maximize the value that together we will bring to our customers and in identifying new ideas in the security space.”

Based in Roswell, Ga., USSA has operations in the United States and internationally, with revenues in excess of $1.5 billion. This acquisition is expected to increase Allied Universal's national presence and customer service capabilities and will also enhance its presence in Canada, as well as expand its footprint to Central America and the United Kingdom. USSA also provides Allied Universal with a sizable consulting and investigative division and event staffing business, StaffPro.

Jones told Security Systems News, “This is a company that we had in our sights for the last several years, so strategically we knew it made a lot of sense. It was a company that was really working hard to evolve and change itself, … do a lot of the things that we are doing with regards to integrating more technology into their business.” For example, he pointed out that USSA invested heavily in building out some hand-held technology that is predictive with the security officers in regard to their roles and responsibilities.

“This merger with Allied Universal is a testament to the hard work and dedication of the men and women of USSA,” Richard Wyckoff, president and CEO of USSA, said in the announcement. “We have focused on world-class customer service by providing innovative manpower and technological solutions to our clients. The industry has taken notice. I am very proud of what our team has accomplished and very excited that integrating our business with another industry leader will mean more growth opportunities and career advancement potential for our associates.”

Once the deal closes, Jones said the integration of USSA into the Allied Universal family will begin in earnest in 2019, “when we will start to phase in the U.S. Security Associates operations into the Allied Universal operations with the goal of having that completed by the mid-year of 2019,” he explained. “So it is a thoughtfully planned out integration timeline. First and foremost, we are taking our time on this because we are focused on having no disruptions to our existing client base. We will be folding their operations into Allied Universal's operations, changing their name to Allied Universal and doing all of the rebranding, so it is almost a year transition from today to get all of that done.”

This deal adds to Allied Universal's strong revenue base, which as of last quarter was just shy of $5.6 billion, said Jones. “Two years ago when we announced the merger with Universal the combined revenues were $4.5 billion, so we are pretty proud that we grew our topline revenues by more than a billion in less than two years, so that is exciting.”

Financial advisors to Allied Universal for the transaction included Barclays, Citi, Credit Suisse, Deutsche Bank, HSBC, Moelis, Morgan Stanley and Societe Generale, with Cleary Gottlieb Steen & Hamilton LLP providing legal counsel. Financial advisors to U.S. Security Associates included Goldman Sachs and KeyBank, with Fried, Frank, Harris, Shriver & Jacobson LLP providing legal counsel.