Wackenhut deal final after shareholders' vote

Business now owned by Danish company after 48 years of Wackenhut family ownership
Saturday, June 1, 2002

PALM BEACH GARDENS, Fla.-Though an 48-year run as a family owned business ended for the Wackenhut Corp., a new chapter began for the company's U.S.-based operations.

The new company, now headed by Alan Bernstein, president and chief executive officer of the company's U.S. operations since the company's purchase by Group 4 Falck in May, will consider alarm company acquisitions in the future.

"Companies that have effectively never been on Wackenhut's scope, alarm companies and cash-in-transit companies, will be a real opportunity for us to expand our services in the United States," said Bernstein.

The company currently is one of the largest guard companies in the country, employing 38,000 people. It also provides fire protection, prevention and response services.

The deal came to a close after shareholders gave their approval to sell Wackenhut to the Denmark-based company for $573 million. Shareholders had to come together twice to vote on the acquisition, since the companies were awaiting government approval still when the first meeting commenced.

"The deal can now close in the next few days, barring any unforeseen circumstances," said Pat Cannan, a spokesperson for Wackenhut, shortly before the shareholders meeting on May 8.

For Group 4, the deal provided the company with a platform in the $14 billion U.S. security guard market. Wackenhut also operated businesses world-wide, with offices in 39 countries. Group 4 also owns a 57 percent stake in Wackenhut's corrections division, Wackenhut Corrections Corp.

Bernstein said employees in the field and the company's clients should see minimal changes, if any at all. The only difference is that the company had to "set up an entity to be in compliance with the FOCI (Foreign Ownership, Control, or Influence) regulations of the U.S.," Bernstein said.

That separate entity will handle classified security business, such as government work.

While few changes may be visible on the outside, some administrative personnel may be laid off at the company's headquarters. Bernstein did not have numbers on how many people may be affected, but said that positions handling SEC filings and stock exchange information, for example, would likely be eliminated since Wackenhut is no longer listed on the New York Stock Exchange.