Security

Convergint Security Systems Integration Business and Financials Examined

In this Research Note, we examine Convergint, the North American security systems integrator. This analysis covers the firm’s turnover development, ownership, its target vertical markets and global expansion strategy beyond North America. Headquartered in Schaumberg, Illinois, Convergint is a leading systems integrator that designs, installs, and services electronic security, cybersecurity, fire and life safety, building automation, and audio-visual systems. The firm has been listed as #1 in SDM Magazine’s Ranking of Top North American Systems Integrators for the past five years. Convergint reports over 7,700 employees and more than 200 locations worldwide. Completing more than 50 acquisitions since 2001, the company has significantly deepened its vertical market expertise across numerous sectors, particularly in data centers, utilities, healthcare and financial services. In recent years, the company has also expanded its global reach, allowing it to better serve multinational customers in EMEA and Asia Pacific. Ares Management Corporation, a US alternative investment manager, acquired the company in Feb 2018 and since then, the […]

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In this Research Note, we examine Convergint, the North American security systems integrator. This analysis covers the firm’s turnover development, ownership, its target vertical markets and global expansion strategy beyond North America.

Headquartered in Schaumberg, Illinois, Convergint is a leading systems integrator that designs, installs, and services electronic security, cybersecurity, fire and life safety, building automation, and audio-visual systems. The firm has been listed as #1 in SDM Magazine’s Ranking of Top North American Systems Integrators for the past five years. Convergint reports over 7,700 employees and more than 200 locations worldwide.

Completing more than 50 acquisitions since 2001, the company has significantly deepened its vertical market expertise across numerous sectors, particularly in data centers, utilities, healthcare and financial services. In recent years, the company has also expanded its global reach, allowing it to better serve multinational customers in EMEA and Asia Pacific.

Ares Management Corporation, a US alternative investment manager, acquired the company in Feb 2018 and since then, the company has experienced strong growth with revenue and EBITDA more than doubling since 2017. In December 2021, Ares sold a stake in Convergint to Leonard Green & Partners and Harvest Partners, as a result of which all three private equity firms are financial partners with the company.

The company achieved $1 billion in revenue in 2018. Convergint saw only minimally reduced demand for its commercial security systems in the face of the COVID-19 pandemic. Through 2020, organic revenue grew by 4% and margins held steady, underscoring the company's cyclical resilience. According to the 2022 SDM Top Systems Integrators Ranking, Convergint’s North American systems integration revenue was $1,704 million in 2021. The company currently reports $1.8 billion total revenues.

In the Asia Pacific region, Convergint’s presence has expanded recently with several acquisitions, which are consolidated via Convergint’s APAC subsidiary, ICD Security Solutions, recently renamed to Convergint.

In February 2022, Convergint acquired Prosys Services, a Sydney based Australian tier-one provider of video analytics, access control and video management systems. Prosys Services adds 124 colleagues, a deepened presence in New South Wales (NSW), and a new office in the Australian Capital Territory (ACT). This deal marks Convergint’s third acquisition in Australia, having previously acquired Western Australia-based Cerberus Technologies in 2020 and Victoria-based Integrators Australia in 2018. Convergint Australia now has over 200 colleagues and offices in Auckland, Brisbane, Melbourne, Perth, and Sydney.

In April 2021, Convergint announced the acquisition of Diebold Nixdorf’s Asia Pacific electronic security business. The business provides security solutions for financial, retail, and other verticals across the APAC region. The company’s service offerings include security system design, integration, installation, maintenance, embedded services, PA systems, integrated building management systems and fire systems implementation. 

Diebold Nixdorf 2021 10K report reported that the divestiture of this non-core business resulted in a gain of approximately $1.0 million and cash proceeds of $5.8 million.

Since ICD Security Solutions became part of Convergint in 2013, the subsidiary has grown significantly to operate in 58 locations in 12 APAC countries with 900+ colleagues. Revenues exceeded $100 million in 2020.

Source: ICD Security Web Site

In Latin America in April 2021, Convergint announced the acquisition of Seal Telecom, a systems integration provider with reach throughout the region. Seal Telecom provides audio and video systems, unified communication and fire and security solutions. The acquisition adds over 500 colleagues to the Convergint team, servicing Brazil, Argentina, Chile, Colombia, Peru, Mexico, and the Caribbean.

In the EMEA region, In October 2021, Convergint announced the acquisition of Keyotel, a German security systems integrator. Founded in 2009, Keyotel provides customers with electronic locking systems, video surveillance technology, safes, and energy management products. The company has more than 600 customers, ranging from large industrial companies to small and medium-sized businesses, military facilities and hotel chains. As a result of this acquisition, Convergint will double its footprint across Germany, establish an office in Frankfurt, and further strengthen its service to global customers. 

Plans for expansion across Ireland were announced by Convergint in November 2021, which included recruiting 50 colleagues over the subsequent 2 years. Convergint first announced its presence in Ireland in 2016 and in January 2019 acquired Ireland’s largest independently owned security systems company, MTS Security, in Dublin.

In December 2021, Convergint announced the acquisition of Universal Security Systems, a European security systems integrator headquartered in London, UK with offices in Pohjoisesplanadi, Finland, and Copenhagen, Denmark. The acquisition adds nearly 100 colleagues. Universal Security Systems' revenue, year ending 30 November 2020 was reported as £29.26 million ($35.5 million), in an official filing.

Convergint is gaining momentum beyond the Americas through inorganic growth and global expansion initiatives in Asia Pacific and EMEA.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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