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Security Force

Steve Jones, CEO of OC's Largest Private Company, Remains on an Acquisition Push

Allied Universal Chairman and Chief Executive Steve Jones made one of the world’s largest acquisitions last year when his Santa Ana-based security firm acquired London-based competitor G4S PLC in a $5.1 billion deal.

What surprised him about the deal, one that more than doubled Allied’s ­revenue run rate to $20 billion?

“I thought we were in only 90 countries, but then I figured out 96,” Jones told the Business Journal.

“I’ve learned that we speak 35 different languages in our company. As you can imagine, at the first two levels in the organization, executive management, everyone speaks English.

Below managing director, they often don’t speak English,” he said.

“Making sure information is passed along in the same way with the same intent is a little challenging,” said Jones, who joined the predecessor of Allied Universal in 1996 when its annual revenue was around $12 million.

Through almost 100 acquisitions and organic growth, he’s turned the company into the world’s seventh largest private employer, with more than 800,000 employees.

 

G4S Deal

G4S was a London-based firm that traced its origins to Copenhagen in 1901 and was officially formed in 2004 when two security firms from the U.K. and Denmark merged.

After a fierce bidding battle that took place over a six-month period on the London Stock Exchange, Jones eventually completed the deal in April last year.

The acquisition has “gone really well,” Jones said.

“We fully integrated its North America operations within six months, which was remarkable,” Jones said.

“By the end of 2021, we had International set up the way we wanted to. We’re super excited about it.”

Jones has been a longtime admirer of how Waste Management grew by rolling up competitors around the U.S. and streamlining procedures such as hiring and training.

He’d already accomplished a lot: he was previously recognized by the Business Journal as both a Businessperson of the Year and Excellence in Entrepreneurship Award winner, each prior to the G4S deal.

Allied is now “bigger than I ever planned,” he said. “Originally the goal was to build a billion-dollar business. Now it’s 20 times that. We have over 400 branch operations in U.S.”

Since Jones completed the G4S acquisition, the company’s run rate has grown from $18 billion to $20 billion. He’s still aiming for $25 billion in annual sales by the end of 2025.

Allied is now Orange County’s largest private company by revenue. Factoring in both corporate positions and on-the-ground security personnel at many of the area’s top malls, office parks and entertainment venues—often recognized by blue corporate shields on their sleeves—the company employs about 6,000 in the county.

 

Hottest Spots

Jones nowadays finds his company involved in many of the hottest war spots around the world.

“We were in Afghanistan providing security to the World Bank,” when that nation fell to the Taliban last year. “We had to get our people out. I’m proud of that.

“That was an eye opener for a guy who grew up in Orange County.”

Allied’s security forces are providing protection to major clients in Kiev during the Ukrainian-Russian war. Some of its guards have been called up to the Ukrainian military, he said.

“Initially we were going to shut down business in Ukraine,” Jones recalled. “The team in Ukraine begged me to stay there.

“We’ve had customers throughout Ukraine that we cannot service anymore. The businesses are not there because the cities have been destroyed. There have been lots of lessons learned, lots of eye-opening experiences.”

 

More Acquisitions

The G4S acquisition is one of 17 announced by Allied Universal in the past 18 months. There’s no end in sight.

“We will continue to be acquisitive, both U.S. and internationally,” said Jones, who noted more headwinds these days when looking to expand via acquisition.

The Federal Reserve’s increase in benchmark interest rates has made money more expensive, he said.

“We have money set aside,” Jones said. “We’ll still be active, but deals have to make sense.”

Earlier this year, the company was “looking really hard” at an initial public offering, he said.

Then the IPO market changed dramatically for the worse, causing a delay in the plans.

“We will absolutely in the future one day proceed with an IPO,” he said. “I don’t know the time frame, maybe within next 24 months. We’re really happy it wasn’t earlier this year.”

 

Tech and Dogs

Allied’s technology division alone is generating almost $1.5 billion in revenue annually; services include designing, installing and maintaining electronic monitoring systems that can lock and unlock doors around the country. It has a 25,000-square-foot facility in Richardson, Texas.

“It’s really a combination of people and technology that’s going to continue to try to solve the problem of keeping people safe,” Jones said. “We want to continue to grow there.”

One “neat” acquisition was last September when it bought MSA Security, which has close to 1,000 canines and $200 million in annual sales.

“It’s a great business that’s uniquely positioned,” Jones said, noting the dogs can detect firearms in addition to explosives.

Allied Universal intends to keep its headquarters in Orange County, having just signed a seven-year lease for a 60,000-square-foot facility in the Irvine Marketplace area that it will move into during the fourth quarter.­

“Our business comes down to one thing—we’re about trying to keep people, business and communities safe,” he said.

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.
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