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Pinkerton's Contract With GM Is 8 Years, $1.1 Billion

November 20, 1998| From Bloomberg News

Pinkerton's Inc., the world's largest security services company, on Thursday won an eight-year contract valued at $1.1 billion, its largest ever, from General Motors Corp. and its auto-parts unit.

Pinkerton's shares rose $1.63 to close at $19 on the New York Stock Exchange after it announced the contract.

The contract calls for Pinkerton's to provide security, investigations, personnel protection and emergency management services for the world's largest auto maker and Delphi Automotive Systems, the world's No. 1 auto-parts company. The contract would cover security officer and patrol services for more than 150 GM and Delphi plants in the U.S.

Westlake Village-based Pinkerton's has provided security services to GM in the U.S., Canada, Mexico, Latin America and Asia for more than five years. It recently received a contract for GM's Adam Opel plant in Portugal.

The company said it's currently in talks with GM to extend its contracts in Canada and Mexico. The latest contract includes an option for GM and Delphi, which is set to become a publicly traded company early next year, to extend the agreement past 2006.

Pinkerton's, which recently posted third-quarter net income of $3.74 million, or 29 cents a share, on revenue of $229.3 million, has annual revenue of more than $1 billion.

GM shares fell 13 cents to close at $72.56 on the NYSE.

The eight-year contract expands an existing five-year relationship between Pinkerton's and GM and represents the world's largest commercial contract for the outsourcing of security services, Pinkerton's said in a statement.

The new contract also allows for an extension beyond the year 2006, although the value of an extension has not been determined.

Pinkerton is one of the world's largest security companies, providing uniformed officers, investigations, consulting, business intelligence, security-systems integration, and employee selection services.

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