MARKET  «  MARGINS  »  MULTIPLES

JULY 2010

1. Only one major transaction in the US security guard sector:  Tri-S Security sold its sole operating subsidiary, Paragon Systems, Inc. to Pinkerton Government Services, Inc.; a wholly owned subsidiary of Securitas AB.
2. Margins for large and small security guard companies continue to slide.
3. Industry and financial buyers continue to be aggressive and seek quality acquisitions.  The multiples paid and being offered continue to hold.
4. Several concerns on the horizon for owners of security guard companies:
   • Unions are given more freedom to organize the security personnel.
   • New healthcare bill signed into law continues to confuse, but definitely means more cost to employers.
   • Operating costs on the rise, especially healthcare and unemployment taxes.
   • Federal income taxes are expected to increase starting in 2011, which will make owning (and selling) a company a lot more expensive
5. Reports and surveys indicate that the security guard market will continue to grow in the low single digits for the next 3 years.
6. More security guard companies are looking to companion markets as a way to offset their shrinking margins on traditional standing security guard services.

Click Here to Download the White Paper