Yesterday ACRE announced that it would be acquiring the Texas-based Open Options, a 20-year-old access control company that has been a Mercury Security partner since 1997. Its first acquisition since 2016, this move strengthens ACRE’s access control business and expands its product portfolio that already includes brands such as ComNet and ATC.
To gain more insight on the acquisition, SDM spoke with ACRE’s CEO, Joseph Grillo, about the company's expansion and its plans for the future.
SDM: Yesterday’s press release stated that this acquisition is part of a larger strategic expansion plan for ACRE. Can you tell me more about these big picture plans?
Grillo: For ACRE, part of the investment thesis is to grow primarily in the access control space, and the acquisition of Open Options gains us size and scale, and it also gains us more of a balanced revenue between the North American market and the European market where ACRE became larger after the Siemens acquisition in 2015. And lastly it adds a tremendous business that’s growing and profitable, and also has focused on its namesake, open options, the trend in the security industry which has been fairly proprietary for much of its history.
SDM: Why does ACRE want to expand its presence specifically in the access control market?
Grillo: We believe there’s a benefit to consolidating what has traditionally been a highly fragmented part of the security market.
SDM: This is the first acquisition that ACRE has carried out since 2016. Why did right now feel like a good time?
Grillo: I don’t think it’s the now, we’ve just always been inquisitive and it’s just a question of the timing. We’re not a huge company — we’re not UTC, we’re not Honeywell — so we don’t have a merger and acquisition department. But we’ve always been inquisitive; we’re out in the marketplace talking to people all the time, and talking to people about what opportunities there might be.
SDM: Will you be retaining all of Open Options’ employees? What will happen to its leadership?
Grillo: Absolutely; we’ll keep the leadership, we’ll keep the people, we’ll keep the technology, and really important — we’ll keep the brand because I think Open Options has a very strong brand in the marketplace.
SDM: You said that you’re always looking into acquisition opportunities — are you planning any for the near future?
Grillo: We’re always looking, so stay tuned. It’s what we do, and my history in being involved as one of the founders of HID means a lot of years of being out there in the industry and getting to know a lot of people. So we’re talking to people all the time; it’s a natural thing and part of what we do.
SDM: What is your vision for the future of ACRE?
Grillo: The future of ACRE is much the same. We started this business in 2012, we’ve done six acquisitions, and we continue to look at growing the business both organically and externally, and becoming a much larger player in the security industry.