It seems like every year, the annual SD&I Fast50 ranking of the fastest-growing security integrators and dealers takes on a new form – with many new and inspiring companies taking the baton from ones who dominated the rankings just a year ago. This year was no exception; in fact, in the seven-year history of the Fast50, only the first two years saw the same company atop the list (Securityhunter).
The plain truth is, many of the security integration companies that enjoyed long runs in the SD&I Fast50 rankings simply no longer exist.
Why? When a company does what it takes to be fast-growing, it puts a bullseye on its back. They might face stiffer competition, but more likely, competitors with deep pockets start taking a much closer look at the potential for acquiring those companies.
Want a telling statistic? According to our research, 55 percent of the companies that entered the Fast50 this year have been approached within the past two years to sell or merge their business with another company.
Indeed, the rich seem to get richer in this industry. Simply visit SecurityInfoWatch.com a couple times in any given week, and you will see another dealer or integrator being acquired and folded into dominant global/national integrators like ADT or Convergint Technologies or Red Hawk. You will even see super-regional players like ADS Security making acquisition headlines.
“They call that consolidation,” chuckled Jim Coleman, former owner of Operational Security Systems, which was acquired by Convergint in May 2017. Another integrator, Dakota Security Systems, was on the Fast50 list multiple times until it was acquired – also by Convergint – in early 2016.
Convergint, in fact, is the leader in the clubhouse when it comes to acquiring Fast50 integrators (read more); however, there are plenty of companies getting into the consolidation act. ADT, for example, has acquired five different commercial integrators in just the last eight months; and Securitas made headlines by acquiring former Fast50 integrator Kratos PSS just last month.
The fact is, all this activity and the attractiveness of this industry as a whole is having an appreciable impact on the landscape of the security service provider market. Rest assured that a handful or more of the companies you see listed on page 17 will be part of a larger company in 2019; however, this may leave openings for new players on the local and regional levels.
It will be interesting to look at the security integration market in particular in five years. Will it be three major global/national players in one sandbox and “everyone else” (the regional and local players) in another?
“There is great potential for the Fast50 of the future,” says Eric Yunag, former owner of Dakota Security Systems. “This is still a great industry to be in, and one where there is plenty of opportunity to start and grow and compete at a local and regional level. Companies that can perform at a high level are always going to be successful in this business.”
Paul Rothman is Editor in Chief of Security Dealer & Integrator (SD&I) magazine. Access the current issue, archives and subscription links at www.secdealer.com. Access our Fast50 archive page at www.securityinfowatch.com/sdifast50.
