WESTMINSTER, Colo. – PSA Security Network launched the first of its new Limited Liability Companies (LLC) called Virtual Distribution & Management on January 1, 2006. A second LLC is planned for May 2006.
The creation of a series of independent LLCs is part of PSA’s strategic business plan and is intended to provide greater flexibility to meet the changing marketplace, as well as offer new opportunities and ultimately savings to its members.
Cooperatives by nature are not investment vehicles which limits their ability to raise equity capital. As a cooperative, PSA will continue having limited membership - a benefit to members but a disadvantage when it comes to meeting vendors’ growth expectations. By developing separate LLCs, PSA can provide new channels for product distribution while lowering member costs and meeting vendor expectations. The LLCs can then partner with others to gain access to the needed capital and to new markets not currently available.
This first LLC, Virtual Distribution & Management, will operate as a wholly owned subsidiary of PSA. Subsequent LLCs will be privately funded and have an exclusive Evergreen contract with PSA that will be mutually beneficial to both entities. Each LLC will have its own CEO and Board of Directors.
“The rapid consolidation of companies and technology changes within the industry required a new paradigm. The LLCs provide us with the freedom to negotiate projects and pricing with outside companies and to receive outside capitalization – two things we could not do under our structure,†said PSA president and CEO, Bill Bozeman, CPP.
Because the LLCs will have a greater distribution than PSA, which is only able to sell to member companies, the LLCs can purchase products and services in larger quantities. This will allow PSA to leverage a greater buying power for lower prices and members will reap the benefits of greater savings.
“In order to provide competitive services at competitive prices to our members, we needed to offer PSA services at a profit outside our member network,†said Gary Venable, chairman of the board of PSA Security Network. “Creating the additional LLCs will increase the value of PSA membership both as a key vendor and as a creator of new opportunities.â€
In addition to being chairman of the board, Venable’s company, All Systems Designed Solutions, Inc., is a PSA member. Venable believes this strategy will not only secure PSA’s future, but enable PSA to keep a long-term vendor critical to his company’s future.
PSA’s increased buying power will also allow its members to be more competitive, allowing them to compete with the large national and worldwide organizations that are becoming major forces in the security industry.
“Our members can use the increased buying power of the LLC to get in front of the larger national end-user companies,†Bozeman added.
PSA is on the web at www.psasecurity.com.
