Six security outfits merge into one $100m firm

Jason Cherrington, who heads the new company says it merges physical security outfits with those that specialise in virtual security. Photo / Supplied.

Six security companies have merged to create Optic Security Group, which will have annual turnover around the $100 million mark.

Staff were told about the deal this morning.

Optic meshes together four New Zealand outfits, with two from Australia, and will be headquartered on this side of the Tasman.

The concept behind the new company is to merge physical and digital security, with each player bringing unique skills or geographical reach.

Chief executive Jason Cherrington says he first got the idea when he took the reins at Auckland-based Fortlock 18 months ago.

Fortlock offered physical security for clients like the Ministry of Justice, installing access systems and CCTV and, via outsourcing, security guards if needed.

But Cherrington says he had an eye on the US and UK markets, where companies like Fortlock were merging with IT services companies to mesh old-school security hardware with new tools to counter cyber-threats.

Once upon a time you could put a CCTV system in place to simply watch people, now it will be networked and open to attack. He says many New Zealand company directors are complacent about growing cyber threats, and the vulnerability of their businesses across the board.

He wanted to create a converged security company here before one of the American or British players arrived.

He duly oversaw Fortlock's acquisition of Wellington IT services company Comsmart - but he wanted more scale.

A mutual friend then introduced him to deal-maker Chris Gulfrie, who helped him put Optic together.

The full lineup of companies that came together to form Optic is NZ's Fortlock, Comsmart, Circuit Systems and SSL plus Australian firms Security & Technology Services and Bemac, with M&A support from KPMG and and BNZ, ASB and Arena Investors providing financing.

Gulfrie was earlier one of the prime movers behind a rollup in another sector: child care centre play Evolve Education. Evolve's shares faltered after it missed its prospectus targets (it listed at $1 per share on the NZX and closed friday at 33c).

However, there are no plans to list Optic.

The new company has around 200 staff and around 1000 customers.

Cherrington won't comment on financials, but he says all of the firms who came together to form the new business were "independently successful".

He says Optic will continue to expand through M&A.

He's currently in talks with two potential acquisitions, both companies on the digital side of the fence.