Securitas Electronic Security acquires Kratos PSS for $70 million
The acquisitions environment in the security industry for the first quarter of 2018 remained hot, as Securitas Electronic Security (SES) announced its agreement to buy the Kratos Public Safety and Security division from Kratos Defense & Security Solutions on March 1.
The deal – reportedly worth approximately $70 million – would position the merged SES as the fourth-largest security systems integrator in the world.
“Based on our 2017 Security Systems Integration Report published in October (that uses 2016 as a base year), this (merger) would give Securitas and Kratos a combined market share of 1.2 percent globally,” explains Oliver Philippou, an analyst for IHS Markit research. “Comparatively, Johnson Controls – including Tyco – is approximately three times larger than Securitas in terms of security integration revenue, with a market share of 3.4 percent.”
Securitas officials say the move aligns well with its current operations and strategic focus. It also expands its U.S.-based security services by strengthening field operation capabilities and adding local branch infrastructure and employees.
For SES President Tony Byerly, the acquisition of Kratos PSS signals an “exciting time” for both the parent company and SES, pointing out he expects the transaction to close in the second quarter, pending regulatory approval.
“KPSS is an ideal acquisition for Securitas, as it supports the global Securitas electronic security strategy and strengthens the company’s electronic security platform,” Byerly says.
“Additionally, it is an important next step in the execution of Securitas’ North American strategy to provide a complete range of protective services to the company’s collective customer base,” Byerly adds. “For SES, it expands our national footprint in the U.S., adds highly skilled associates to the team, and opens new markets and opportunities for future growth.”
In addition to traditional security technologies that include enterprise-level deployments of video surveillance, access control, audio/messaging and perimeter detection, Kratos PSS also provides rapidly evolving technologies such as digital video analytics, LAN/WAN convergence and wireless solutions. Its proficiency with converged security and IT services support the current and emerging needs of its client base.
The operation has annual sales of approximately $135 million and includes 400 employees.
“As most in the industry know, KPSS has a rich history of quality service, integration expertise, marquee customers and iconic large projects,” Byerly says. “The company was built on a number of acquisitions, including highly-regarded companies like Henry Brothers and Ingersoll Rand Security Technologies. For us, this acquisition is about growth, strengthening our core capabilities, expanding our portfolio of security solutions, entering new markets and exploring new technologies.”
As for Kratos’ parent company, it appears to be refocused on the government contracting market. “This divestiture will allow us even greater focus on our high-growth core businesses, including unmanned aerial drones, satellite communications, missile defense, training systems and microwave electronics,” Eric DeMarco, Kratos President and CEO, said in a statement.
Steve Lasky is the Editorial Director of SouthComm Security Media, which includes print publications Security Technology Executive, Security Dealer & Integrator, Locksmith Ledger Int’l and the world’s top security web portal SecurityInfoWatch.com. He is a 30-year veteran of the security industry and a 26-year member of ASIS. [email protected]
