Paris-based private equity firm Wendel has agreed to sell approximately 40% of its equity stake, along with other existing shareholders, in Allied Universal, one of the largest providers of security services in North America, to Caisse de dépôt et placement du Québec (CDPQ). This transaction places an enterprise value of $7 billion on Allied Universal.
Following the transaction, Wendel will retain an 18% ownership stake in the company and CDPQ will become the largest shareholder of Allied Universal. Other equity owners of Allied Universal include Warburg Pincus and members of the company’s senior management team.
Allied Universal provides a mix of services including traditional manned guards, fire and life safety emergency preparation services, systems integration and remote monitoring, and janitorial services. The company has annual revenues of $7 billion and over 200,000 security professionals located at over 38,000 client sites.
Allied Universal has two headquarters facilities, one in Santa Ana, CA and the other near Philadelphia in Conshohocken, PA (www.aus.com).
In addition to the equity purchase transaction, Allied Universal has entered into an agreement with CDPQ for it to provide up to an additional $400 million of capital to support the company’s growth strategy and acquisition plans.
“This investment, which represents one of the largest private transactions in business services, enables us to invest in a national leader in facility and security services, a sector that will continue to experience sustained organic growth and industry consolidation,” said Stephane Etroy, executive vice president and head of private equity at CDPQ. “We look forward to supporting Allied Universal’s talented management team as they continue to grow this world-class business and build on its track record of providing its clients a customized mix of manned guarding and security technology solutions.”
Caisse de dépôt et placement du Québec is an institutional investor that manages funds primarily for public and para-public pension and insurance plans. As of June 30, 2018, it held C$308 billion in net assets (www.cdpq.com).
“CDPQ’s agreement to acquire a significant ownership stake and invest in Allied Universal is a strong endorsement of the company’s strategy and vision for the future and, most importantly, the incredible work of our entire team,” said Steve Jones, president and CEO of Allied Universal. “Wendel and Warburg are terrific partners who have supported our rapid growth over the past several years and we look forward to adding CDPQ to our shareholder base. We think CDPQ’s long-term approach is well-suited to our strategy for continued growth in manned guarding and technology services and look forward to working with them as partners.”
Wendel acquired Allied Universal (then AlliedBarton Security Services) in December 2015 for $1.7 billion. In August 2016, AlliedBarton merged with Universal Services of America, owned by Warburg Pincus, to create Allied Universal. In October 2018, Allied Universal acquired Roswell, GA-based US Security Associates (USSA), a portfolio company of Goldman Sachs Merchant Banking, for approximately $1 billion. USSA provides unarmed and armed uniformed security services, consulting and investigative services. Goldman Sachs Merchant Banking acquired USSA in July 2011 from Wind Point Partners.
Wendel traces its roots back to 1704 and is an active investor in European and North American-based companies across a range of industries. The firm is controlled by members of the Wendel family and is headquartered in Paris (www.wendelgroup.com).
“I am delighted to see that CDPQ, a high-quality investor, is joining us to further develop Allied Universal and strengthen its leading position in the industry,” said André François-Poncet, Wendel’s CEO. “This transaction also provides Wendel with further means to identify new high-quality assets and grow its portfolio over the long-term.”
Warburg Pincus has more than $44 billion in assets under management and has raised 16 private equity funds since its founding in 1966. The firm is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore (www.warburgpincus.com).
Citigroup Global Markets was the financial advisor to CDPQ while Barclays and Morgan Stanley & Co. were the financial advisors to Allied Universal.
CDPQ’s investment in Allied Universal is expected to close in the third quarter of 2019.
© 2019 Private Equity Professional | February 21, 2019
