Andy Stern flip-flops on private equity

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Private-equity firm Blackstone Group is buying King of Prussia-based AlliedBarton Security Services Inc., a company that employs 52,000 security guards and others in the United States. Terms of the deal, announced yesterday, were not disclosed.

AlliedBarton, formerly SpectaGuard Inc., had revenue of $1.5 billion in 2007 and net income of $347,000, according to a regulatory filing. Before taxes, interest payments and other items, or EBITDA, the firm earned $89.1 million.

MacAndrews & Forbes Holdings Inc., which is controlled by financier Ronald O. Perelman, acquired the security firm in 2003 for $263 million. AlliedBarton has almost tripled in size since then, through acquisitions and internal growth.

William C. Whitmore Jr., AlliedBarton chairman and chief executive officer, said yesterday that he did not expect employee cutbacks and that the new corporate parent should give AlliedBarton access to capital to expand the business.

The firm employs 5,000 in the Philadelphia region.

The Blackstone deal, which is expected to close in August, should be "a good marriage," and the fundamentals of the business remain strong because "people want to protect their assets," Whitmore said.

AlliedBarton security guards protect shopping centers, commercial offices, government offices, colleges, hospitals and manufacturing plants. When it was formed in 1980 as SpectaGuard by Jay Snider (son of Flyers chairman Ed Snider), the company's yellow-shirted employees worked primarily concerts and sporting events.

SpectaGuard acquired Allied Security in 2000, and the combined company began operating under the Allied name. In 2004, the company purchased Barton Protective Services Inc. for $181 million and now operates nationally under the AlliedBarton name.

Blackstone is a huge New York-based private-equity firm with about $100 billion in assets.

In an unusual statement, the Service Employees International Union said it supported the deal. The SEIU, which has two million members, has been critical of private-equity firms for flipping assets, receiving favorable tax treatment, and paying huge compensation to the industry's top executives.

The union said the AlliedBarton deal "holds great potential for thousands of hard-working security officers nationwide." The statement said the union was hopeful that Blackstone's purchase "will improve the existing relationship between SEIU and AlliedBarton and lead to better jobs for security officers."

Blackstone publicly supported higher wages, health care and improved working conditions for unionized janitors during contract talks in Boston in 2007, SEIU spokeswoman Linda Tran said yesterday.


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