Blackstone Group to acquire AlliedBarton

July 25, 2008
Private equity fund purchases security services provider

Security services firm AlliedBarton announced today that it has signed an agreement to be acquired by an investment fund of The Blackstone Group, a private equity management firm.

AlliedBarton's chairman, president and CEO Bill Whitmore, said the move "is a tremendous opportunity to fuel our continued growth." Whitmore said the company will use the investment to focus on continued growth of "people, technology and training."

In an interview with, Whitmore said that Blacktone is committed to growing AlliedBarton, and he said that he anticipates much of that growth to be organic, though he says they may find natural "tuck-in" acquisitions that allow the company to increase market share or business skillsets with niche acquisitions.

Whitmore said AlliedBarton clients should not expect to feel any ill effects as part of the acquisition.

"Blackstone's model is to look for companies with a proven management team known for growth and they will be supporting the management team that is in place," said Whitmore. He noted that the company's ongoing commitment to training its employees was likely part of the factors Blackstone looked at when deciding to invest i n AlliedBarton, and he says that focus on training will continue at the firm.

According to Chinh Chu, the senior managing director for The Blackstone Group, the equity firm will be working with AlliedBarton to create organic and acquisition-based growth.

The purchase of AlliedBarton by The Blackstone Group is expected to be completed in August 2008 after regulatory approval is reached. The form 8-K related to this acquisition is expected to be filed with the Securities and Exchange Commission on Tuesday, July 29, 2008.

The Service Employees International Union, which unionizes security officers among other service workers, has publicly come out in support of the acquisition of AlliedBarton by The Blackstone Group. The support was predicated by what the SEIU called "Blackstone’s public support for efforts by janitors in Boston and security officers in Los Angeles to win a better life for themselves and their families." That "public support" had come through relationships between the SEIU and Blackstone regarding services contracts at Blackstone-owned commercial real estate properties, according to John Ford, a media relations spokesperson for The Blackstone Group.

The SEIU issued the following statement: "We support Blackstone's purchase of AlliedBarton and are hopeful it will improve the existing relationship between SEIU and AlliedBarton and lead to better jobs for security officers throughout the country,"

According to Ford, the acquisition of a purely service-based company was not unique for The Blackstone Group, however, he did say that this was really the first time the equity firm had reached into the world of security.

The Blackstone Group has invested previously, said Ford, across a wide variety of sectors, ranging from clothing manufacturing to telecommunications, gaming, waste services, healthcare and more. Ford added that the average time for Blackstone to hold a company, such as this planned acquisition of AlliedBarton, has been five to six years.

"We invest where we think we can create the best value," said Ford, who added that the company's model has been to invest in and improve any company it buys so that at the end of the planned investment period, it can make a profit off the investment.