When Securitas completed the acquisition of STANLEY Security’s Electronic Security business in July, it made reference to Tony Byerly as the “Global President of Securitas Technology (formerly Securitas Electronic Security).”
On Wednesday, Byerly – along with Securitas President & CEO Magnus Ahlqvist and CFO Andreas Lindback – provided a much clearer picture of the company’s intended strategies and goals for Securitas Technology moving forward, in a formal investor update.
Byerly emphasized that Stanley more than doubled the existing Securitas Electronic Security (SES) business, positioning it globally as the second-largest commercial security technology provider.
Byerly explained that the addition of Stanley adds nearly 8,000 dedicated security professionals to his team, including more than 3,000 field technicians. Stanley also brought more than 500,000 clients, which Byerly said increases the opportunity to serve them across all of the Securitas services, including guarding and protective services, as well as monitoring, maintenance and installation.
“Over the past four weeks since the closing, I have had the privilege to meet and engage several hundred Stanley Security associates and leaders…and the energy and excitement is palpable,” Byerly said. “The Stanley team members are genuinely energized by the opportunity to become part of Securitas. I've also had the privilege to speak with numerous clients who are very positive about the acquisition and our expanded coverage or increased capabilities.”
“We are adding critical mass and market density in 11 of our key strategic markets, where we will now have an estimated top-three market position in those countries,” Byerly added. Those countries would include: the United States, Canada, United Kingdom, France, Spain, Sweden, Norway, Finland, Denmark, Belgium, and the Netherlands.
He said one of the driving forces behind the acquisition was adding recurring revenue, including an increased in cloud-based and subscription-based services. “An important aspect of our acquisition strategy has been on the positive development of our RMR as a percentage of our total sales,” Byerly said. “Stanley strengthens our mix into these higher margin revenue streams, with approximately 40% of their sales [including] recurring revenue.”
He reported that Stanley joined Securitas with “a positive installation backlog growth of 33%.” For the first six months of 2022, Stanley Security had a record installation backlog, with growth of 18 percent compared to the same period last year.
The company has established a new financial target of 8-10 percent annual average real sales growth in its “Technology and Solutions” segment.
Dealing with Market Challenges
No investor call would be complete in the past few years without discussing the proverbial headwinds, which Byerly said are similar to those being faced by others in the technology space. He cited the COVID resurgence that occurred during the first part of 2022, which negatively impacted labor resources, client availability and scheduling stability.
He added that the continuing effects of supply chain disruption and component shortages continues to challenge the industry, but it will normalize over time.
Finally, he reported that inflationary pressure has had an impact on the Stanley business. “The legacy approach of updating prices on an annual or even a semi-annual basis does not work anymore in this inflationary environment,” Byerly said. “The good news is that the Stanley leadership team started to take actions to address pricing prior to the close, and that will continue to materialize. As new pricing takes effect, it takes time to work its way through the installation backlog as the mix of legacy jobs is eventually replaced with the newer-priced jobs.”
More M&A to Come
“Although in the near term, we are fully focused on the successful integration of Stanley and achieving our business objectives, the highly fragmented industry creates a strong opportunity in the future to continue our successful bolt-on strategy in select markets,” Byerly said.
Paul Rothman is Editor-in-Chief of Security Business magazine.
