The physical security services industry segment is characterized by recurring revenue models, steady and healthy profit margins (particularly among private companies), and “sticky” customers with multi-year terms. The competitor structure differs considerably from one geography to the next in the United States as well as overseas. In addition, the definition of security services is fairly broad with some services driving higher margins than others. Lastly, the demographics and professional backgrounds of the employees hired to provide services is a key differentiator among physical security services firms.
UEI is interested in the physical security services firms providing security patrols, executive protection, remote monitoring and alert/alarm response, or information collection. We prefer businesses targeting commercial customers and commercial property owners of both residential and commercial properties. UEI favors businesses in this category with a high concentration of military veterans or former law enforcement professionals.