Posts Tagged Africa

Industry Talk: GardaWorld Buys Aegis Group For Expansion Into Africa And ME

This is some big news. Both GardaWorld and Aegis are big companies, and this is more sign of consolidation in the industry as the market compresses. The Iraq and Afghanistan wars have drawn down significantly since the hey day of contracting, and moves like this signal the latest strategies of the major companies–if they want to survive.

I first found out about Aegis shopping around for buyers from Intelligence Online. It has a paywall, but what little they said in the brief description is all I needed to know. As for GardaWorld, here is a snap shot from Wikipedia as to their size and status. Pretty big..

GardaWorld Security Corporation is a Canadian private security firm, based in Montreal, Quebec, Canada, with 45,000 employees (by November 2013). Though GardaWorld International Protective Services, now the international division of the company, began its operations in 1984, Garda World Security Corporation was established by its Quebecer owner Stéphan Crétier in 1995, who initially invested $25,000 in the company, then named Trans-Quebec Security Inc. The company is the fifth largest consulting and security services firm in the world, with operations in North America, Latin America, Europe, Africa, Asia and the Middle East. The company today runs heavily on physical security guard services as well as armoured car services in select countries and cities throughout the world. The firm has over 200 offices worldwide.

And then here is the size of Aegis and what they do, based on their Who We Are page on their site. The CEO is Tim Spicer by the way, who used to own Sandline International.

Aegis is today a diverse and comprehensive organisation operating in countries spread across several continents in a variety of service streams.
Founded in 2002, Aegis was established as a US government security provider from 2004, when it was awarded the ground-breaking Reconstruction Security Support Services Iraq (RSSS-I) contract with the US Department of Defense. The $1.3 billion lifetime value of this contract made it one of the largest security contracts ever awarded.
The experience and ethos built during the RSSS-I contract, and a range of other government and commercial contracts in Iraq, allowed Aegis to transition to the Security Support Services Iraq (SSS-I) contract, and to secure and successfully mobilise the security for the US Embassy Kabul, a project which currently employs over 1000 people.
The definition and requirements of security are ever changing. In recent years, we have grown a successful security service business in support of the extractives industry, focused initially on the Oil and Gas sectors in Iraq, but expanding into East and North Africa. We have also been in the vanguard of developing comprehensive business practices and ethical codes of conduct for the security industry and as such we are one of the first companies to become accredited to the industry standard (PSC 1).
Aegis now provides a wide breadth of complementary service streams including Kidnap for Ransom Response, technology integration, advisory and intelligence, training, consultancy, strategic communications and protective services. Across these areas we employ over 3500 people at any one time and run a fleet of over 300 vehicles.

That is 48,500 plus or minus employees and contractors!… Quite the army. lol

As to the details of this acquisition, I will post what the companies have sent out for PR. The news release mentioned a couple of interesting things. First is the fact that both companies are the first to be PSC-1 certified. The second interesting tidbit is that the new company wants to hit the African and Middle Eastern markets hard with their services. Aegis will definitely bring a lot to the table when it comes to those regions.

I have written in the past about GardaWorld and their goals in the middle east, and I view this as further proof of those plans drawn up by CEO Stephan Crétier. Although they have had some hiccups and the whole Daniel Menard episode in Afghanistan was one example. I also found an article that talked about how the draw down of the wars in Iraq and Afghanistan, and the fierce competition between those that were still on the scene, has resulted in companies like GardaWorld to ‘be competitive’. In other words, lowering salaries and hiring cheaper labor–something we have seen in the maritime security market as well. 

One final note. I have no idea if everyone that is working for Aegis now, will have to change t-shirts and wear the GardaWorld crest?…  Or if all the benefits and pay scales will change, now that Aegis has a new owner. We will see how that goes and that process can be kind of crappy for the employees and contractors of said company.

Sometimes with these things, the parent company likes to keep the newly acquired company intact with the same name and everything. Just different owners with a little crossover of upper and mid- management. But who knows, and we will see how the acquisition goes? I will leave it to those employees, contractors, upper management, etc. in the comments below to explain how things are going. –Matt



GardaWorld Announces Strategic Expansion to Become the Premier Security Provider in Africa and the Middle East

As part of its expansion, the company signs a binding agreement for the acquisition of Aegis Group

MONTREAL, QUEBEC–(July 13, 2015) – GardaWorld, the world’s largest privately owned security and cash services provider, announces today the strategic expansion of its protective services platform in Africa and the Middle East.

Over the past decade GardaWorld has continuously expanded its operational capacity as demand for specialized and professional services to protect high profile diplomatic staff, development projects and leading oil & gas companies dramatically increased in Africa and the Middle East. In the current geopolitical context, such comprehensive security services offering remains critical for companies and governments operating in the region and GardaWorld has committed to become a premier security provider globally. The company expects to complete this phase of its strategic expansion plan before the end of the year.

As the first phase of its strategic expansion, GardaWorld is pleased to announce that it has entered into a binding agreement for the acquisition of Aegis Group, a leading provider of highly specialized protective services with annual run-rate revenues of over CAN$450 million with a presence across 10 African and Middle East emerging markets.

“Aegis Group’s operational platform will complement GardaWorld’s offering and geographic footprint as we continue to build our protective services capabilities throughout Africa and the Middle East,” said Stephan Crétier, Founding President and CEO, GardaWorld. “Aegis Group and GardaWorld have both been truly committed to setting the highest professional and ethical standards in the industry. We are the first two private security providers in the world to obtain the PSC.1 certification, offering our clients a complete peace of mind service solution in emerging markets. Once we have completed the integration, we will become a clear market leader, providing premier professional security services with the unsurpassed depth of our offering and strength of our global platform.”

“In the next phase of our growth strategy, planned for later this year, we expect to further expand GardaWorld’s regional infrastructure and to double our physical footprint by reinforcing our presence on the ground in nearly 20 countries in Africa and the Middle East. Our goal is to offer a specialized and distinctive protective services offering, to more clients, including governments, diplomatic organizations, large critical infrastructures, mining, oil & gas companies, NGOs and Fortune 500 corporates, in more places and where they need us most than any other company in our market,” continued Mr. Crétier.

GardaWorld’s acquisition of Aegis Group is subject to customary closing conditions, including regulatory approvals and is expected to close within the next 90 days.

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Industry Talk: Prince Targets Aviation And Logistics In Africa

So is this Blackwater part 2?
“It’s similar,” Prince replied. “But we’re not here to serve government or defence projects, we’re not there to build their police force, nothing like that. We’re there to move an NGO, an advanced seismic crew or a drilling crew from a mining company, or if an oil operation needs their camp supported and built.”

The story of Erik Prince starting Frontier Resource Group and focusing on Africa is not new and I have blogged about that when it first came out. But what was missing were the details, or at least more than what was available at the time I posted that stuff. Thanks to the Civilian Warriors book and all the interviews, Prince has been able to talk a little more about this new venture.

So in the articles below, there are some great little details to pluck out and talk about. The first one that I thought was interesting, was the ‘a ha’ moment for Prince as to what area of business he wanted to get into in Africa.

Prince, who has flown since he was 16, said he realised the potential of operating a safe and reliable air service a year ago when the aircraft which was flying him back from a mine site in Burkina Faso nearly crashed.
“A scary moment but also one of clarity,” he said.

I mentioned in my review of his book that he is an entrepreneur and businessman, and he constantly looks at the world through this lens. His ‘a ha’ moment for the creation of Blackwater came from the realization that he needed to be home with his family, and the SEALs and other groups needed a consolidated, all in one training facility. So he identified a market weakness that he could exploit, and also saw the advantage for his personal well being.

He is also a pilot and has had a love for aircraft since he was younger. In his book, he was very proud of all the aviation ventures that BW got into, so this move towards aviation and logistics in Africa makes sense.

The other tidbit is the quote up top and what was directly asked in regards to security work. He was asked by the WSJ on whether this new venture would include armed security work or not? Here is the quote.

Such high costs also reflect the dangers of piracy and civil conflict, but Mr. Prince plays down his firm’s plans in the security realm. “We are not there to provide military training. We are not there to provide security per se. Most of that security”—say, if an oil pipeline or mining camp needs protection—”would be done by whatever local services are there,” including police and private firms. “We don’t envision setting up a whole bunch of local guard services around the continent.”
So the former Blackwater chief won’t employ guys with guns? Well, he says, “that would be the exception, certainly not the rule.”

I should remind the reader that Prince could easily contract the services of other security firms to help in security.  That would mean using Academi or any of the offshoots of his older company. But like he mentioned in the quote, using local police or security firms is more than likely the path, which is already what most Chinese investors and companies are doing.

Although the problem with this arrangement is if those local forces are dependable? Can they deliver services on time and under budget, or is it even a good service? Can they provide high level PSD services for the engineers and workers for those companies? That is where PMSC’s like Blackwater would come in. Also, someone needs to manage those local forces, or look out for the best interest of the client.

I am quickly reminded of the In Amenas gas plant attack in Algeria and how depending upon incompetent local security forces (provided by the government) was a contributing reason why the attack was so successful. You must have a competent security company watching over the local security force that companies are either forced to use, or use because of cost and choice. I look at it from a concentric rings of security view point, and your outer layer should be your least dependable force and your final ring of security should be your most dependable. Ideally all rings are dependable in a perfect world, but that just does not happen in the real world. Another way to put it, is you need security you can ‘trust’.

But back to the articles below, I think this quote speaks pretty loudly as to why dependable and highly capable services are in such high demand in Africa.

“If you’re drilling in some remote area and your rig goes down and you need a new part for your rig; that’s 10s if not 100s of thousands of dollars a day. How do you get that thing quickly and with no excuses?”

Time is money as they say, and guys like Prince can absolutely organize an effort to get that part or human out there.

This also reminds me of another potential problem for companies. What if their equipment gets caught up in a mess like what the Arab Spring has created in the Middle East? For that, a guy like Prince could organize the effort to secure equipment and people until it can be either flown out or convoyed out of that mess.  Those types of contracts remind me of what helped put Executive Outcomes on the map.

I am talking about the Ranger Oil contract that Executive Outcomes had in Angola. Basically things became unstable there and Heritage Oil and Gas turned to EO to save some equipment caught up in the mess. At the time, they were leasing some drilling equipment that was costing over $20,000 a day, and UNITA would not allow the company to get the equipment out of there. EO was contracted to secure that equipment, which they did.

It is also important to note that the Chinese account for the largest group of people kidnapped in Africa. I have talked about this demand for protective services by the Chinese in the past, and how the South African PMSC market has been filling that niche. Lot’s of money being spent on some risky projects–hence the need for security and folks who know what they are doing.

As long as we are talking about money, it is also interesting to pluck some of the quotes that discuss why Africa is so interesting to Prince. China is investing billions into development and resource extraction there.

Mr. Prince won’t share any revenue projections, but his prospectus notes that “China is Africa’s largest trading partner,” with annual flows of $125 billion. Most estimates put that figure closer to $200 billion, a meteoric increase from $10 billion in 2000 and $1 billion in 1980. The U.S., which was Africa’s top trade partner until 2009, registered $100 billion in annual African exchange at last count. China-Africa trade could reach $385 billion by 2015, according to Standard Chartered Bank.

Not only that, but the US is also delving more and more into Africa with it’s military ventures. So Prince is basically gunning to be the logistics and transportation ‘go to guy’ for Africa. If US strategy includes getting more involved with Africa, it will need companies in place that can provide a need wherever it presents itself.

Although he does have some competition, because there are numerous larger companies  that have already been working that angle in Africa. PMSC’s in Somalia and their support of AMISOM are one example. There is still room though, and investors are looking for folks that they trust can do the job. That is a key point here, because Prince has shown capability in the past by making things happen, and putting his money where his mouth is. He spent over 100 million on new products and services when he owned BW, and much of it never reached fruition. But some did, and really paid off for him. I imagine he will do the same with this company. This quote shows why investors would be drawn to him and what has provoked Prince to get into this market in the first place.

“As I was moving around Asia trying to raise money for this private equity fund, a lot of the big investors said, ‘It’s great that you want to be a fund manager, but what we really need you to do is to build a business like you had before. Not a defence services business, but one that can help us operate in the challenging areas and take away a lot of the uncertainty’.”

Pretty cool and I imagine he will apply the same mindset to this business as he did with BW. Research the region, find services that are lacking or non-existent but are needed, or see a coming need for a product or service, and create that service or product to meed those needs. That is how he built BW, and that is probably how he will build this company.

As to what kinds of aircraft he will purchase and bring to the market, who knows?  If you look at the aircraft that AAR has (former Presidential Airways and BW business unit), you can get an idea as to the kind of aircraft Prince might introduce into the game. Here is a quick run down from wikipedia as to what they have used.

Presidential operates CASA C-212 and CASA CN-235 turboprops. Recent contracts have added de Havilland Canada DHC-8 Dash 8 turboprop aircraft to the fleet. The company also operates turbine powered helicopters including Bell 214ST, Bell 412, MD Helicopters MD-530, Eurocopter/Aerospatiale SA 330J “Puma”, and Sikorsky S-61 rotorcraft.

The key for Prince is to invest in aircraft that can carry a lot, has robust fuel capacity, is durable, and can land on the really crappy air strips throughout Africa. The parts need to be cheap as well. I am sure he will find something that fits the bill. Either way, we will keep on eye on this. –Matt

Edit 04/02/2014: It looks like DVN (or it’s new name Frontier Services Group Limited) has acquired another percentage of an airline that operates out of Wilson Airport. Here is a clip from the news story about it.

News broke yesterday in Nairobi that DVN had apparently acquired a 49 percent stake in Phoenix Aviation which is based at Wilson Airport in Nairobi and engages in aircraft charters and aircraft maintenance, among other aviation services. First it was Kijipwa Aviation, based in Kilifi, a relatively small aviation company, in which DVN acquired a 49 percent stake in late February, then announcing that they were to bring on line as many as two dozen additional aircraft to boost the operational capacity of the firm. However, the acquisition of a similar share in Phoenix may change those plans as suggestions have been floated already among the aviation fraternity at Wilson Airport that the operations of the two local airlines may be consolidated or aligned under one umbrella or at least they will be working under one central command. While DVN reportedly dished out some 1.2 billion Kenya shillings to acquire the 49 percent stake in Phoenix, no confirmed value could be obtained for the acquisition of the Kijipwa shares. Both investments have been linked to the discovery of significant oil deposits in Kenya and the apparent need of international oil exploration companies to contract a range of services from local Kenyan companies, including aviation.

Frontier Resource Group website here.

Frontier Services Group website here.



Beyond Blackwater: Prince looks to resources in Africa
Sun, Feb 2 2014
By Stephen Eisenhammer
After running one of the world’s biggest and most controversial private military groups, Blackwater founder Erik Prince is starting a new venture providing logistics for oil and mining companies in remote and dangerous parts of Africa.
China is increasingly looking to Africa to meet its ever growing demand for natural resources. Trade between the two reached an estimated $200 billion (121 billion pounds) this year. With 85 percent of Chinese imports from the continent being oil or minerals, Prince sees an opportunity.
He wants to use his experience of getting people and equipment in and out of remote places, where there is little or no infrastructure, to help companies looking to exploit abundant natural resources in places like Sudan or Somalia.
The 44-year-old former U.S. Navy Seal became chairman of Frontier Services Group (FSG) this month, a Hong Kong-listed company of which China’s state-backed investment fund Citic owns 15 percent. Prince himself has share options in the firm that would convert to a 9 percent stake.

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Company Spotlight: Paramount Group Talks About Security In Africa

Below I have posted a couple of interesting stories about Paramount Group and it’s background. As you can see from it’s Wikipedia page, it is heavily involved with a lot of areas of defense in Africa and they are the largest PMSC in Africa. So when Ivor Ichikowitz (the founder and executive chairperson of the company) talks about private security in Africa, I tend to listen.

I also posted a side deal about an aircraft they donated to help in the war against Rhino poachers. This is a great move by the company because poachers are destroying one of Africa’s top treasures–it’s animals. They also had a vehicle showcased in the popular TV show called Top Gear.

The last article I posted below was not about Paramount Group specifically, but about private security in Africa in general. It talked about the focus of other large companies like G4S in Africa, and it is a great compare and contrast article after reading what Paramount mentioned. If companies want to know what to focus on when delving into this market, it pays to study the market leaders of this continent. Check it out. –Matt



From the website

Paramount Group is the largest privately owned defence and aerospace business in Africa, providing fully integrated turnkey solutions to global defence, peacekeeping and internal security forces.
Since its inception in 1994, Paramount has built strong relationships with governments and government agencies in over 30 countries around the world, earning an enviable reputation as a trusted advisor in the industry.
The Group is a leading innovator in the design and development of state-of-the-art products that it manufactures in locations throughout the world.  It is partnered with some of the world’s largest and most reputable organisations in the global defence community. The Paramount Group has the ability to understand its client requirements and to use its unique knowledge and experience to design cost-effective, future-proof solutions. As a result, Paramount has enjoyed strong growth and achieved an excellent track record of delivering successful projects.

From Wikipedia
Paramount Group is a group of companies operating in the global defence, internal security and peacekeeping industries. It was founded in South Africa in 1994 and offers a range of armoured vehicles, military aircraft, equipment and training to governments.
The company was founded by South African entrepreneur and industrialist Ivor Ichikowitz. The Group is based in South Africa, with its headquarters near Johannesburg.
Paramount Group manufactures a range of armoured vehicles – the Maverick, Mbombe, Matador and Marauder – and in 2011 unveiled AHRLAC, a long-range reconnaissance and surveillance aircraft. AHRLAC is the first aircraft to be designed and built from scratch in Africa.
The business has government clients in 28 countries and partnerships with leading international defence and aerospace players, including Aerosud Holdings Ltd, its partner in the development of AHRLAC (Advanced High-Performance Reconnaissance Light Aircraft).
In February 2011, Paramount Group announced a joint venture with Abu Dhabi – based defence business International Golden Group to market and distribute Paramount Group’s products and services in the United Arab Emirates.
Paramount Group’s Marauder featured in an episode of the BBC’s Top Gear programme. Television show presenter Richard Hammond took the vehicle on a test drive in South Africa to put the vehicle through its paces in comparison to a Humvee in a bid to find ‘the world’s toughest car.’ The programme was broadcast in July 2011.
AHRLAC was launched in September 2011 and described by commentators, including the Wall Street Journal, as filling a niche for a versatile, low-cost aircraft.


Security Is Key To Africa’s Economic Rise
By Ivor Ichikowitz, chairman of Paramount Group, Africa’s biggest private defence company.
Ivor Ichikowitz reports
22 November 2012
The most important single factor in boosting an emerging economy is a stable state. I believe that all things flow from this.
Capitalism is the most powerful driving force behind Africa’s economic development but businesses must be able to be run without the fear of suddenly losing all their assets in unexpected or undemocratic changes in government.
Criminals, terrorists and rebel groups further undermine economic activity across the continent and need to be effectively countered. It has been estimated, for example, that over 10% of Nigeria’s oil production is stolen between source and sale by criminal gangs, including groups who tap directly into long pipelines that are extremely vulnerable to theft in isolated areas.

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Industry Talk: Erik Prince Starts Africa Focused Investment Firm With Frontier Resource Group

Prince, who credits the Navy SEALs with bringing out his entrepreneurial spirit, said there were two main risks that perhaps every businessman in Africa must face.
The first one is the political risk in some countries, and the second is the very bad transportation and infrastructure, which means a high cost of doing business there.
“If you can’t get to market cheaply enough, that’s not interesting,” Prince said.
Many foreign investors came to Africa purely for its natural resources, he said, but they forgot that transporting those resources was as important as exploring and producing them.

This is interesting news. As I mentioned before in prior posts, Africa will be a top focus for PMSC’s just because of all the business and resource extraction potential there. A company like Frontier Resource Group can easily be the company that can link the investors with those PMSC’s that could protect and insure those investments in Africa. Or at the least, FRG can help to identify those investments with the highest chance of success based on the risk assessments done by FRG.

The mention of Chinese investors partnering with FRG is key as well. I mentioned in prior posts about an increase in business for South African PMSC’s or consultants from the Chinese, and it would make sense that Prince would want to step in and serve this particular group of investors. –Matt

Website for Frontier Resource Group here.


Into Africa: Ex-navy SEAL sets trail for investors
November 19, 2012
By George Chen
Erik Prince of Blackwater fame has set up a company that will be the ‘search radar’ to help firms manage the risks of investing there
The man who built up Blackwater – the giant private security force that guarded US diplomats in some of the world’s most dangerous places, including Afghanistan and Iraq – sees Africa as his future.
After Erik Prince sold his firm to investors about two years ago, the former officer in the Navy SEALs – the special US military force that killed Osama bin Laden last year – set up a new company called Frontier Resource Group (FRG) early this year.
FRG is an Africa-dedicated investment firm partnered with major Chinese enterprises, including at least one state-owned resource giant that is keen to pour money into the resource-rich continent.
“Africa is so far the most unexplored part of the world, and I think China has seen a lot of promise in Africa,” Prince said during a brief trip to Hong Kong last week to meet potential Chinese investors and partners. “But the problem is if you go alone, you bear the country risk on your own. You have to get support and maintenance there,” Prince, FRG’s managing partner, told the South China Morning Post in an exclusive interview.

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Somalia: MPRI In The News–US Trains African Soldiers For Somalia Mission

This is a cool little article that mentioned the work that MPRI is doing currently in Africa as part of the ACOTA program. It just shows how important companies like this, or Bancroft Global, Dyncorp, Halliday Finch or Sterling Corporate Services are to the task of trying to stabilize Somalia. –Matt


U.S. trains African soldiers for Somalia mission
By Craig Whitlock
May 13, 2012
The heart of the Obama administration’s strategy for fighting al-Qaeda militants in Somalia can be found next to a cow pasture here, a thousand miles from the front lines.
Under the gaze of American instructors, gangly Ugandan recruits are taught to carry rifles, dodge roadside bombs and avoid shooting each other by accident. In one obstacle course dubbed “Little Mogadishu,” the Ugandans learn the basics of urban warfare as they patrol a mock city block of tumble-down buildings and rusty shipping containers designed to resemble the battered and dangerous Somali capital.
“Death is Here! No One Leaves,” warns the fake graffiti, which, a little oddly, is spray-painted in English instead of Somali. “GUNS $ BOOMS,” reads another menacing tag.
Despite the warnings, the number of recruits graduating from this boot camp — built with U.S. taxpayer money and staffed by State Department contractors — has increased in recent months. The current class of 3,500 Ugandan soldiers, the biggest since the camp opened five years ago, is preparing to deploy to Somalia to join a growing international force composed entirely of African troops but largely financed by Washington.

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Maritime Security: Pete Bethune And Team To Battle Illegal Fishing In Africa

Bethune says, “I stood on a beach in Mozambique and watched the poachers just off shore. The sheer numbers of illegal longliners and trawlers raping the waters of fish is astounding. The lack of resources available to stop them is frightening – Mozambique has just one vessel to patrol 3000km of coastline. The poachers continue to take millions of tonnes of fish that does not belong to them with no fear of reprisals. They laugh in the face of the law.”-From the Earth Race Conservation website.

Thanks to Fredrik for sending me this. Pete Bethune is famous for being arrested by Japan during anti-whaling operations a couple of years back. Now he is getting into the game of battling poachers on the high seas, who illegally fish in areas off the coast of Africa. Interesting, and we will see how this goes for them.

Also, I have no details on this other than what is in the video below. He does have a website and you can follow along with his team’s efforts in the future. I have no idea if Mozambique is the country they will work out of, or if they have a different place to go.

On a funny side note, he used Captain Morgan rum to christen his new vessel. Captain Morgan rum got it’s name from the famed ‘privateer’ named Sir Henry Morgan, and I thought that was an interesting choice of bottle.  Check it out. –Matt


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