5 Companies Merge Security Groups

[Centermass]

Academi, the company formerly known as Blackwater and Xe, will join Triple Canopy along with a handful of other high threat security companies under a new management structure named Constellis Holdings.

“This move allows us to create a suite of services to better provide critical support capabilities for government and commercial clients and will utilize ACADEMI’s world-class training facility, the largest and most comprehensive private training center in the U.S.” said Jason DeYonker, Managing Director of Constellis Holdings, Inc.

Constellis Holdings, Inc. has agreed to acquire Constellis Group, Inc., a leading provider of security, support and advisory services to government, multinational corporations and international organizations operating in challenging environments around the world. Constellis Holdings was formed by the founders of Triple Canopy and the private equity investors who formed ACADEMI.

The transaction brings together a global team of industry leaders, including: Triple Canopy, Constellis Ltd., Strategic Social, Tidewater Global Services, National Strategic Protective Services, ACADEMI Training Center and International Development Solutions.

Operating under the oversight of a distinguished Board and an experienced management team, the combination of these companies will enable a significant expansion of services within the global security market, delivering mission support, integrated security solutions, training and advisory services at home and abroad.

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Looks like it resembles a Time Warner/Comcast merger

 

[DA SWO]

Looks like a lot of shrinkage in the contracting world.

 

[AWP]

Interesting but not surprising. One trend I noticed is that some of the large defense companies would buy small businesses which already had a gov't contract. Once they are in the door they provide services strong enough to win the follow-on bids even if they would probably lost the initial bidding process.

These are obviously THE players in security, but they lack the capital of an L3 or Boeing or Lockheed, so this is a pretty sound business decision. I don't know how it will effect the guys on the ground, but this is the nature of business.

 

[DA SWO]

Interesting but not surprising. One trend I noticed is that some of the large defense companies would buy small businesses which already had a gov't contract. Once they are in the door they provide services strong enough to win the follow-on bids even if they would probably lost the initial bidding process.

These are obviously THE players in security, but they lack the capital of an L3 or Boeing or Lockheed, so this is a pretty sound business decision. I don't know how it will effect the guys on the ground, but this is the nature of business.

It'll also allow a consolidation of personnel management/support positions (payroll, trainers, etc).
The ability to consolidate training facilities also lowers contract start-up costs.

 

[AWP]

It'll also allow a consolidation of personnel management/support positions (payroll, trainers, etc).
The ability to consolidate training facilities also lowers contract start-up costs.

Great points and something I didn't consider. we even do it with my company: my PM is one of 4 who reports to a Program Manager yet we all share the same support staff.

Whatever a contractor's motivations for going overseas, at the end of the day the company is in it for a profit. For better or worse, that's the nature of the beast.

 

[CQB]

Mergers usually means redundancy for some, usually from the smaller company.

 

[Kraut783]

Name sucks, I mean Blackwater, Triple Canopy are good and memorable names....Constellis Holdings, not so much.

 

[TLDR20]

Name sucks, I mean Blackwater, Triple Canopy are good and memorable names....Constellis Holdings, not so much.

I think they don't want to be memorable.

 

[Kraut783]

I think they don't want to be memorable.

True.....but...I mean if they didn't have history that we knew of. The names themselves are catchy.

 

[Gunz]

I guess a foreseen consequence of force reductions in what were once lucrative markets for American contractors?

 

[BloodStripe]

One thing to remember about government contracting is every company that bids on a contract has a SAM rating. Many of the large companies (ie Boeing, Lockheed Martin, L-3) all have the capability to under-bid smaller jobs which they know they can easily handle just to boost their score. By forming a new company, you also don't have a SAM score (I am not sure how that rating works for service based companies, but for manufacturing you get rated for your quality and whether or not the project was completed on time) so there could also be an interior motive by them merging (aside from the lower start up costs as mentioned and there also will be fewer competition for bids).