Convergint Technologies has spent the better part of the last three years evaluating their local and regional competitors, and more often than not, those competitors seem to find themselves a proud part of “Convergint Nation.”
It appears that CEO Ken Lochiatto and Executive Chairman Dan Moceri have actually perfected the art of the security acquisition. Powered by both its organic growth and its many acquisitions over the past few years, Convergint has been a fixture in our annual rankings, and the company finds itself again in the top 10 of the SD&I Fast50 in 2018 – this time at No. 5 (up from No. 10 last year and No. 16 in 2016).
“One of the reasons we have been successful with so many acquisitions is that we look at each one of them uniquely,” Moceri explains. “There is no such thing as a ‘cookie-cutter acquisition’ – we don’t slam them all together on day one, and we don’t take out headcount; in fact, we haven’t done one acquisition based on reducing headcount over 21 acquisitions.
“We like to take our time and do them right,” Moceri adds. “We aren’t trying to grow for growth’s sake. If you look at all the acquisitions, a lot of them are for (expanded) geographic service coverage. While we can go anywhere in the world and do an installation, service is a local issue, so we have to be there on a local basis.”
Convergint has made 16 acquisitions in the past 27 months: Dakota Security Systems, H&E Comfort Controls, Enion AG Integrated Security Systems, Total Recall Corporation, Corporate Security Systems, TA Canada, Go Security Solutions, Post Browning, Operational Security Systems, Integrated Security Systems, SigNet Technologies, Integrated Security Systems Division of SDI Presence, Security Products Company, Genesis Security Systems and its most recent, Alphacorp, which was announced in March.
Just as important as each individual company acquired – many of which were perennial Fast50 companies – is the talent and leadership coming with them. Through these many acquisitions, Convergint has added a large number of vocal and influential security industry leaders and business owners, and the fact is, the vast majority of them actually stay with the company.
What exactly compels someone who owns their own business and is their own boss to become part of the Convergint Nation? I sat down with two of those owners – Eric Yunag, former owner/CEO of Dakota Security Systems and Jim Coleman, founder and owner of Operational Security Systems – for an inside look at not only what happens as their companies were folded into Convergint Nation, but how the company leverages its newfound leadership and experience to power even more growth and success.
Coleman started OSS with his brother Tom the moment he graduated from Georgia Tech; in fact, he never worked for anyone else during his 45-year run as a business owner in the security industry. “I’ve never had a boss,” Coleman says. “After the acquisition (in May 2017), I was visiting clients with Tim Beasley (who is the Southeast Regional VP of Convergint), and one asked me what I think about Tim, and I said ‘well he is the best boss I ever had in my life.’”
All kidding aside, Coleman – who has held quite a few high-profile leadership positions in the industry, including President of the Security Net group of integration companies – needed to find a good partner when Tom Coleman decided it was time to retire. “We were looking for a way of allowing my brother to retire while at the same time looking out for our customers and employees,” Coleman explains. “We found a good match in Convergint. Our values and their values were closely aligned.”
It was a different situation for Yunag, who actually had no intention of selling his business until Convergint inquired. “It was not something I was really looking for at all, but as a young CEO in our industry, I really studied and admired what they were doing at Convergint,” Yunag says. “Only because it was Convergint did I honestly begin to entertain the conversation (of selling). At any point in the future I could have gotten someone to write me a check to buy a profitable and successful growing integrator, but to have (Dakota Security) come together with the culture that Convergint has and what it would do for our customers and employees – the odds of it coming around like that again for me, our employees and our customers were slim to none.”
Convergint bases its culture on its “values and beliefs” that Coleman says closely aligned with the culture he had built at OSS. He cites phrases like “we expect to be our customers’ best provider” and “we believe in balanced lives for family and business and community” and “we believe in a positive work environment” and “we promote fun and laughter.”
“That was pretty close to what we have been about for 45 years, so there weren’t any problems with us fitting into their culture,” Coleman says. “Sometimes you have values and beliefs and they are just words on a poster that are hanging on a wall. What has been reassuring and affirmative for me is that (Convergint’s values and beliefs) are like a North Star, and people always veer toward them.”
“For the vast majority of the companies that have been acquired, the cultures are extremely similar,” Yunag adds. “I think that’s part of what has made Convergint’s rapid growth so successful – it is putting so much emphasis on the cultural fit of the companies that are being acquired.”
Creating a Team of All-Stars
Looking at the owners of the businesses Convergint has acquired is like perusing a who’s who roster of influential and up-and-coming leaders in the security industry. People like Coleman and Yunag, Jeffrey Nunberg, Mike Painter, Glen Kruglak, Bill Keller, Kevin Sheridan and a host of others – they are experienced business owners and the type of people who are leading the industry at conference events and for industry associations/conglomerates like PSA, SIA and Security Net.
“We are growing so rapidly that we need a lot of leaders,” Moceri says. “We have been very fortunate to be able to pick up some of the outstanding leaders in the industry, and now they are key leaders in the Convergint organization.”
But with so many experienced business owners and leaders, a key challenge is keeping them engaged in their post-ownership lives. Convergint, it seems, has also made that work.
“Convergint is very good at finding out what are you passionate about, what skills that you are gifted at, and what do you want to do,” Yunag says. “For some people, that is running a local business; for others, that’s being deeply engaged in a vertical market. It is an environment that is big enough, yet humble enough to allow new people to come to the table with additional skills and capabilities. That’s why we are all still here. The proof is in the results, and the vast majority of the leaders who join Convergint are still with the company.”
In other ways, joining the Convergint Nation is a way to take the pressure of the day-to-day business management responsibilities off a former owner. “You can focus on things like keeping your customers happy and helping your employees be better at what they do and not have to worry as much about legal issues and insurance, healthcare and the things that are hard to do for smaller companies,” Coleman says. “That’s what made sense for me.”
Both Yunag and Coleman add that there are often secrets to success in different regions and vertical markets that are uncovered only after an acquisition is complete. “Our director of acquisitions often talks about this concept of magic beans,” Yunag says, “which is a bit of a tongue-in-cheek reference to the unique assets and capabilities that our acquisitions often bring.”
“There always seem to be magic beans that you didn’t know you were getting,” Coleman adds. “They listen to what made you successful and they try to incorporate that into the larger nation.”
After speaking with Yunag and Coleman, there is certainly a lot of truth to Moceri’s statement that there is no cookie-cutter approach to security acquisitions – and when your company bases much of its growth on continued acquisitions it seems to be a key to managing and leveraging growth.
Convergint is growing at an unprecedented rate for an integrator in this industry. There are now 80 Convergint Technology Centers (CTCs) – what most people would refer to as branch locations – that form the Convergint Nation of 3,500 employees (and growing). In the end, that is the secret to the company’s success.
“Being part of Convergint Nation is the best of all worlds,” Yunag says. “We are able to operate our businesses to best serve our local customers while also gaining access to a worldwide network of colleagues – friends and coworkers that I can leverage at any time. At any given time, there are 3,500 people around the world that really stand ready to help you with whatever you need.”
Paul Rothman is Editor in Chief of Security Dealer & Integrator (SD&I) magazine. To learn more about SD&I’s seventh annual Fast50 and read about this year’s and previous yearly rankings and market research, please visit www.securityinfowatch.com/sdifast50.