The world’s largest private security group puts a billion-dollar IPO on hold

Allied Universal’s chief executive has shelved the company’s multi-billion dollar IPO while the world’s largest private security group tackles hiring issues and weathers the turmoil in the markets.

“The last 10 to 12 months have been really choppy waters for the public markets so we are very pleased to remain private,” said Chief Executive Steve Jones.

Allied, the world’s largest private security employer with 800,000 employees, has been hit by hiring problems in a tight labor market and wage increases that have dampened sentiment for US listings.

The crisis in the banking sector has also exacerbated the already difficult conditions for raising funds and led to greater uncertainty in the markets and in the economy.

Jones previously said a US listing of the world’s seventh-largest employer and North America’s third-largest in an expected multibillion-dollar deal was possible by May 2024, but “that schedule has been put on hold.”

Applied Value analyst Stephen Rawlinson said Allied Universal’s enterprise value, including debt, could be anywhere from $15 billion to $17 billion. “It depends in part on whether Allied Universal can argue that as the world leader it has market power and is therefore worth a premium,” he said.

Jones said labor shortages have eased, although it was still a tight market post-pandemic, presenting “the biggest challenge we’ve really faced in my 25-year career” for recruiting.

He said the US government’s stimulus programs introduced at the height of the pandemic had impacted the company’s ability to attract and retain workers.

“We’ve had low unemployment rates in the past, but we’ve never had a situation where people got any kind of government subsidy to keep them from working,” he said.

However, he said he “saw the conditions starting [to] improve in terms of inflow of new applicants and new hires”.

Regarding the IPO delay, he said: “There are many factors that we need to consider. . . including general economic uncertainty, recession fears and significant rate hikes over the past year.”

Allied acquired UK-listed security group G4S in 2021 during a series of acquisitions. The transaction was supported by private equity firm Warburg Pincus and Canadian pension fund Caisse de dépôt et Placement du Québec.