The private security firm The O’Gara Group yesterday said it has acquired Protection Devices, Inc. (PDI), a small Texas-based firm that armors SUVs for government and commercial customers.
Terms of the deal were not disclosed. PDI up-armors between 50 and 75 SUVs annually, primarily Chevrolet Suburbans, with its largest customer being the Department of State by a “wide margin,” Bill O’Gara, CEO of The O’Gara Group, told Defense Daily.
PDI has one of five contracts with the State Department to provide it with armored vehicles to protect diplomatic personnel worldwide.
The vehicle armoring business is nothing new to The O’Gara Group, which 10 years ago as O’Gara-Hess & Eisenhardt sold its business that up-armored Humvees for the United States military to Armor Holdings.
The armored Humvee business went through a tremendous growth boom during most of the past decade as U.S. forces in Iraq and Afghanistan came under attack by roadside bombs and small arms fire, necessitating the need to armor the light utility vehicles and eventually procure even heftier ones like the Mine Resistant Ambush Protected vehicles.
Armor Holdings later acquired military truck maker Stewart & Stevenson before it in turn was acquired by Britain’s BAE Systems in 2007, near the height of the bubble for armoring military vehicles.
For five years after selling O’Gara-Hess, O’Gara said his firm was under a non-compete clause to stay out of the vehicle armoring business. And for another five years O’Gara watched the military vehicle armoring business become over inflated.
“Now that the bubble is past, we see a fair degree of consolidation over the next few years,” O’Gara said. “And the market is larger than it was 10 years ago.”
Going forward, The O’Gara Group will focus on the commercial and non-military government vehicle armoring business, O’Gara said. The company already has contracts with the State Department through its Training and Services division, he said. With the pullout of U.S. military forces from Iraq and the winding down of the U.S. military mission in Afghanistan, the State Department is “the place to be” because it will need protected vehicles as its personnel continue to operate in those countries, he added.
O’Gara said he’ll still be keeping an eye on the military vehicle armoring market, which is still shaking out. This will still be a large market but it will be sensitive to defense budgets and military operations, he said.
In addition to the purchase of PDI, which has about 30,000 square feet of manufacturing space and employs 50 people, The O’Gara Group is leasing 36,000 square feet with an option for another 29,000 square feet in Fairfield, Ohio, to open a second armoring facility. The company expects the Ohio operations to be running later this month.
PDI’s owners are remaining with the company.
PDI did not use a financial adviser on the deal.