Fast-growing security services provider Universal Services of America has its eyes set on an initial public offering in the next 18 to 24 months.
The Santa Ana-based company has been on a growth track, notching consistent double-digit organic growth for two decades and adding a steady stream of acquisitions of security businesses nationwide in more recent years.
It’s expected to close this year’s books with more than $2 billion in revenue, a milestone reached in large part via its latest acquisition.
The July buy of Memphis, Tenn.-based Guardsmark LLC added about $500 million in annual revenue to Universal Services and made the combined entity the largest U.S.-owned security company.
“That deal put us in all 50 states—we were in about 47 before that—and in Canada,” said Universal Services Chief Executive Steve Jones. “We think in order to be public, we need to be a size greater than $2 billion … we’re there now. That will give us a decent-sized market capitalization when we go public.”
Jones said the company will likely hit about $2.5 billion by the time of the IPO.
Universal Services operates four main divisions—Universal Protection Service, Universal Building Maintenance, Universal Protection Security Systems, and Universal Fire/Life Safety Services—which operate from offices in Santa Ana as stand-alone entities and offer security, janitorial and emergency services.
For instance, Universal Protection Service, the security-guard unit, provides security professionals and technology at airports, shopping centers, and offices, among other properties.
Universal Services accounts for about 5,300 jobs in Orange County out of a total of 60,000 employees.
The company’s growth has been a product of a “nice mix” of organic growth and acquisitions, Jones said.
‘Nice Mix’
The company, which was founded 50 years ago, has bought and integrated more than 40 businesses over the past 10 years, with at least 21 of those deals notched over the past two and a half years, according to company records.
“These deals have opened new areas for us, whether new markets or geographical territories,” Jones said. “We’ve been able to leverage the strength of our company and all our service offerings.”
It also helps that Universal Services is backed by a couple of global private equity firms.
Zug, Switzerland-based Partners Group AG had been an investor in Universal Services’ corporate debt and in 2013 made an equity investment. New York-based Warburg Pincus LLC acquired a stake last month in Universal Services as an investor alongside Partners Group.
Universal Services was founded in 1965 as a janitorial services provider under ownership of Stephen Salyer and his father, Frederic. The company stepped into the security industry in 1969 when Maintenance Management, owned by Jim Moses, merged into Universal Services.
The company sold the janitorial unit in 1989 and added Universal Fire/Life Safety Services and Universal Protection Security Systems in the late 1990s.
Jones and current Executive Chairman Brian Cescolini, who had been in managerial roles at the company, became partners with the Salyers and Moseses in 2000 and eventually bought out the company, becoming sole owners in 2007.
Universal Services had about $125 million in revenue and some 6,000 employees in the mid-2000s, when the company began to expand geographically under their leadership, opening branches out of state and identifying acquisition opportunities.
Its first deal was the buy of a San Francisco-based firm in 2007.
The company also revived its janitorial services in 2008 under the Universal Building Maintenance name, boosting its service offerings. The company by 2012 had expanded into the Southeast, Midwest and Northeast regions.
“Over the years as we expanded nationally, our executive leadership discussed moving our company headquarters to a central location such as Dallas, Texas,” Jones said. “However, [I] grew up in Irvine and realized that Orange County was the best place to remain, live, work and raise a family.”
Jones affirmed that Universal Services will keep its corporate headquarters in Santa Ana after the IPO.
He said staying in Orange County and California has its challenges, such as being “three time zones removed from New York—the world’s financial center.”
OC Advantages
Still, he said the company counts on the advantages, including “the weather for obvious reasons … [and] a huge pool of talented individuals [and] a great environment, surrounded by successful, growing companies. In addition, our roots are here. … What was a small OC-based security and janitorial company today is the largest American-owned security company. We have aspirations to be the market leader and also to be a company that’s unique. It’s not just manned guarding security services, but electronic security technologies, too.”
