Darien entrepreneur plans 2nd security company IPO

By Peter Healy

Stamford Advocate

December 23, 2007

William Vassell of Darien enjoyed building a security guard company from scratch and taking it public so much that he wants to do it again.

Vassell plans to launch an initial public offering for Stamford-based Murdoch Security Group next spring. He oversaw the 1990 IPO of Command Security, which he founded in 1983. The timing is right for his second IPO of a security company, said Vassell, Murdoch's chairman and chief executive officer.

'The industry is growing at a rate of 15 percent a year and is now at $12 billion,' he said. 'That's not counting (the Department of) Homeland Security, public transportation, courthouses, ports and airports.'

Vassell, 49, acquired Murdoch Security in 2004, the same year he resigned as chairman and CEO of Command Security Corp. Murdoch was founded in 1994.

Murdoch customers include hedge funds and financial services firms, corporate and hedge fund executives and celebrities who live in Long Island's Hamptons region.

Vassell said Murdoch Security does not divulge the names of its customers for confidentiality reasons. However, he did reveal that Murdoch used to provide security services for Amaranth Advisors, the Greenwich hedge fund that failed last year after it lost $6.6 billion in natural gas investments.

Before founding Command Security, the Poughkeepsie, N.Y., native worked part time as a security guard in 1980 for a shipyard on the Hudson River. Vassell said he was studying criminal justice at Western Connecticut State University in Danbury at the time.

Today, Lagrangeville, N.Y.-based Command Security has 3,650 employees and about $120 million in annual revenue. It provides armed and unarmed security guards for office buildings, schools, housing complexes, government agencies and other customers. Command's Aviation Safeguards unit provides airport security.

Command Security's stock has been trading at about $3 this month. Vassell sold 400,000 shares of Command Security for $1 each in 2004 when he left the company, according to a filing with the Securities and Exchange Commission.

Buying market share Robert McCrie, professor of security management at John Jay College of Criminal Justice in New York City, estimated the annual U.S. security services market at $15 billion. The industry is growing at single-digit rates when adjusted for inflation, he said.

Companies and government agencies are aiding the growth with more outsourcing of security that they used to do themselves, McCrie said.

Vassell is gaining a piece of that rising market through acquisitions.

Responding to the growing need for security services in gated communities, Murdoch Security this past summer bought Coral Springs, Fla.-based Fortress Protective Services. It provides security throughout South Florida.

'There's always a need for quality security in places such as high-end condos,' Vassell said. 'The residents are used to having concierge services. It is part of the graying society. They want more services and they can afford them.'

Last month, Murdoch bought Manhattan-based Lansdell Protective Agency. Lansdell provides security officers for the banking, airline and shipping industries. Founded in 1969, it has offices in Manhattan, Long Island, Westchester County, N.Y., and New Jersey.

Valuing consistency To retain customers after it buys companies, Murdoch Security keeps the acquired firms' management in place, Vassell said. That practice gives the customer consistent service, he said.

Murdoch Security employs about 40 people in its Stamford headquarters, and Landsdell and Fortress are among several Murdoch operating units. Others are Murdoch Security & Investigations, Boston-based New World Security, New Jersey-based Randolph Security Services and A-Z Security of Staten Island, N.Y.

A-Z Security provides armed guards for high-end jewelry stores and public utilities. The unit's guards are all retired police officers, Vassell said.

Like many entrepreneurs, Vassell faces competition from the larger players in his industry. Five companies, some of which have international operations, control about 44.4 percent of the U.S. market, according to McCrie.

The biggest is Securitas AB, the $2.7 billion owner of the Burns and Pinkerton's guard companies. It has headquarters in London and Stockholm. London-based G4S, owner of Wackenhut Corp. security, has the next-largest share, with $1.8 billion in revenues, McCrie said.

The next three are King of Prussia, Pa.-based AlliedBarton, $1.1 billion in revenues; New York City-based Guardsmark, $550 million; and Georgia-based U.S. Security Associates, $480 million.

'He will do well'

To stand out among peers, security companies must establish a national presence through acquisitions or go public, said Joseph Biondo, president of the Association of Licensed Detectives of New York State.

Vassell said he could also sell his 800-employee company in a reverse merger. In such a merger, a private

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