security services

Southfield Capital Builds Security Platform

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Protos Security, a provider of security guard services and a portfolio company of Southfield Capital since February 2019, has acquired Security Resources (SRI).

SRI provides security services through a combination of internally managed guards and a network of security guard companies, at locations anywhere in the US, Canada and Puerto Rico. The company’s customers include retailers, property management companies, health care providers and social services organizations. SRI, founded in 1996, is headquartered in Cherry Hill, NJ with additional offices in New York and Philadelphia (www.securityresources.net).

Protos is an outsourced provider of security guards and an electronic management system that allows its customers, which include many Fortune 500 companies, to outsource the onboarding, managing and tracking of security guards at multiple locations. Protos, headquartered in Daleville, VA, manages thousands of security guard locations in the US, Canada and Puerto Rico (www.protossecurity.com).

“Over the last 20-plus years, SRI has blossomed into one of the leading names in the security services space and they have built a highly respected business with a great client roster,” said Andy Cook, a partner at Southfield Capital. “We believe that combining SRI with Protos’ industry-leading technology will enable us to deepen client relationships and provide a broader array of comprehensive security and loss prevention solutions.”

SRI’s co-founders, Joseph Malone and Bob Bond, will remain in their existing leadership roles with the company post-close. “Southfield’s vision to create an industry-leading security services firm committed to delivering extraordinary services to our clients matched perfectly with our philosophy,” said Messrs. Malone and Bond in a released statement. “We are very excited to be merging with Protos and look forward to sharing best practices while enhancing our service offering for all of our clients.”

Southfield Capital makes control investments in companies that are active in the outsourced business services sector and have EBITDA of $4 million to $12 million. In August 2017, the firm held a final close of Southfield Capital II LP with approximately $200 million in capital commitments. The close was at the fund’s hard cap and exceeded its original target of $175 million. Southfield Capital was founded in 2005 and is headquartered in Greenwich, CT.

Monroe Capital, which provided the debt financing for the buy of Protos in February 2019, provided the debt financing for this add-on acquisition. Chicago-based Monroe was founded in 2004 and has additional offices in Atlanta, Boston, Los Angeles, New York, and San Francisco.

© 2019 Private Equity Professional | August 28, 2019

CDPQ Buys Stake in Allied Universal

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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

Allied Universal Buys USSA from Goldman

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Allied Universal, a portfolio company of Warburg Pincus, Wendel Group, and Partners Group, has agreed to acquire 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 including asset tracing; business intelligence and due diligence; digital forensics; intellectual property protection; litigation support; and security program audits.

USSA was founded in 1955 and is headquartered in Roswell, GA (www.ussecurityassociates.com). Goldman Sachs Merchant Banking acquired USSA in July 2011 from Wind Point Partners.

“USSA has built itself into one of the leaders in the security industry over the years and provides a unique suite of security solutions to a wide array of clients across industry verticals. This transaction aligns with our long-term growth strategy of acquiring scalable businesses with significant potential when combined with the Allied Universal platform,” said Steve Jones, Chief Executive Officer of Allied Universal.

Allied Universal provides a mix of services including traditional manned guards, fire and life safety emergency preparation services, and janitorial services. The company employs more than 150,000 security professionals. Allied Universal has headquarters in Santa Ana, CA and near Philadelphia in Conshohocken, PA (www.aus.com).

When the buy of USSA is closed (expected by the end of the third quarter of 2018), Allied Universal will employ approximately 200,000 security professionals and generate combined pro forma revenues of $7 billion. USSA’s pro forma revenues in 2017 were $1.5 billion and pro forma Adjusted EBITDA was $95 million. Based on the $1 billion purchase price, the valuation multiple is 10.5x Adjusted EBITDA.

Allied Universal was formed in 2016 through the merger of AlliedBarton Security Services (a portfolio company of Wendel Group) and Universal Services of America (a portfolio company of Warburg Pincus and Partners Group). Allied Universal will fund the buy of USSA with a combination of additional indebtedness and up to $200 million of equity from existing shareholders. Wendel Group and Warburg Pincus are expected to each maintain approximately one-third economic ownership of Allied Universal.

Warburg Pincus has more than $45 billion in assets under management and has raised 16 private equity funds since its founding in 1966. In November 2015, the firm reached a final close of Warburg Pincus Private Equity XII LP at the hard cap of $12 billion. Warburg Pincus is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore (www.warburgpincus.com).

The Wendel Group 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).

Financial advisors to Allied Universal for this transaction included Barclays, Citi, Credit Suisse, Deutsche Bank, HSBC, Moelis, Morgan Stanley and Societe Generale. Cleary Gottlieb Steen & Hamilton provided legal counsel to Allied Universal.

Financial advisors to USSA included Goldman Sachs and KeyBank. Fried, Frank, Harris, Shriver & Jacobson provided legal counsel to USSA.

© 2018 Private Equity Professional | July 16, 2018

Altamont Sells OMNIPLEX to Apollo

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Altamont Capital Partners has agreed to sell its portfolio company OMNIPLEX World Services to Constellis, a portfolio company of Apollo Global Management. Altamont acquired Omniplex in December 2012.

Omniplex is a provider of background investigations and physical security to the government, civil agencies, and commercial clients. The company, founded in 1990, has approximately 2,100 employees and a network of 1,700 investigators operating across the US. Omniplex, led by CEO Mike Santelli, is headquartered near Washington DC in Chantilly, VA (www.omniplex.com).

“The acquisition of OMNIPLEX is another important step in our growth strategy as we continue to focus on diversifying our revenues by expanding our service offerings to critical customers,” said Jason DeYonker, Chief Executive Officer of Constellis. “OMNIPLEX’s core competency in investigative services is an important upstream capability that brings us closer to our customers to help address some of their most challenging concerns.”

Constellis, acquired by Apollo in September 2016, is a private security company that provides integrated security, mission support and risk management services to corporate, government and nonprofit clients. The firm was founded in May 2003 by US Army Special Forces veterans, including former Delta Force personnel, and has approximately 20,000 employees. Constellis’ US government division is headquartered in Reston, VA while its commercial operations are based out of Dubai, UAE (www.constellis.com).

Altamont Capital Partners invests in middle-market businesses with specific interest in the financial services, government services, consumer/retail, industrials and healthcare sectors. Altamont was formed in 2010 by Jesse Rogers, Randall Eason and Keoni Schwartz who previously worked together at Golden Gate Capital and Bain & Company. The firm has $2 billion of capital under management and is based in Palo Alto (www.altamontcapital.com).

Apollo has total assets under management of $197 billion in private equity, credit and real estate funds invested across a core group of nine industries:  chemicals; commodities; consumer & retail; distribution & transportation; financial & business services; manufacturing & industrial; media, cable & leisure; packaging & materials; and satellite & wireless. The firm has offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai (www.agm.com).

Constellis will finance the acquisition of OMNIPLEX with incremental first-lien term loans under its existing credit facility.

© 2017 Private Equity Professional | August 17, 2017

Apax Completes Sale of Garda

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Apax Partners has completed its sale of Garda World Security, one of the world’s largest privately owned security and cash services providers, to Rhone Capital, Stephan Crétier (Founder, Chairman and Chief Executive Officer) and other members of the senior management team. In November 2012 Apax acquired the company at an enterprise value of C$1.1 billion.

GardaWorld is a global provider of security and cash logistics services. The company serves clients in countries throughout North America, Europe, Latin America, Africa, Asia and the Middle East. GardaWorld works with clients in a range of sectors and industries including financial institutions, retailers, governments, humanitarian relief organizations and the natural resources, construction and telecommunications industries. The company is based in Montreal and has 62,000 employees (www.gardaglobal.com).

Mr. Crétier founded Garda in 1995 with an investment of C$25,000 and grew the company to more than C$1.2 billion in annual revenues until the sale of the company in November 2012 to Apax. “Apax has leveraged its financial expertise to support management in the growth of the company” said Mr. Crétier. “Since November 2012, the company underwent exceptional growth, almost doubling in size in terms of its revenues and its employees. GardaWorld now operates in 29 countries in Africa, Middle East and Europe. The management team and I are excited to continue our partnership with Rhône to build a true global Canadian champion.”

“We are proud of our partnership with Stephan Crétier and his team as GardaWorld achieved tremendous growth both organically and by executing a disciplined M&A program,” said Ashish Karandikar, a Partner at Apax. “Through Stephan’s leadership, GardaWorld has built the preeminent security services brand name globally, and we are proud of the success we have achieved together.  We wish Stephan and Rhône Capital the best during the next phase of the company’s evolution and believe GardaWorld has exceptional opportunities before it.”

Apax invests in the technology and telecom; services; healthcare; and consumer sectors. The firm has eight offices located in London, New York, São Paulo, Munich, Tel Aviv, Mumbai, Hong Kong and Shanghai (www.apax.com).

Rhône Capital is a global private equity firm with more than €3 billion under management and a focus on private equity investments in businesses with a pan-European or transatlantic presence.  Sectors of interest include business services, chemicals, consumer products, food, industrial, materials, mining, and shipping.  The firm is currently investing capital from its €2.6 billion fifth private equity fund which was raised in July 2015. Rhône was founded in 1995 by Robert Agostinelli and Steven Langman and has offices in London and New York (www.rhonegroup.com).

© 2017 Private Equity Professional | June 1, 2017

Apax Exits GardaWorld Security

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Rhone Capital and members of the senior management team of GardaWorld have agreed to acquire the company from Apax Partners. In September 2012 Apax, along with senior members of the company’s management team, acquired the company for C$1.1 billion in cash, including assumed debt.

Upon closing of the transaction, Apax will no longer own shares in GardaWorld, while Stephan Crétier, Founder, Chairman and Chief Executive Officer, will hold, along with certain management stockholders, approximately 39% of the shares in GardaWorld’s parent company and Rhône will increase its holdings to 61%.

GardaWorld is a global provider of security and cash logistics services. The company serves clients in countries throughout North America, Europe, Latin America, Africa, Asia and the Middle East. GardaWorld works with clients in a range of sectors and industries including financial institutions, retailers, governments, humanitarian relief organizations and the natural resources, construction and telecommunications industries. The company is based in Montreal and has 62,000 employees (www.gardaglobal.com).

Mr. Crétier founded Garda in 1995 with an investment of C$25,000 and grew the company to more than C$1.2 billion in annual revenues until the sale of the company in November 2012 to Apax. “Apax has leveraged its financial expertise to support management in the growth of the company” said Mr. Crétier. “Since November 2012, the company underwent exceptional growth, almost doubling in size in terms of its revenues and its employees. GardaWorld now operates in 29 countries in Africa, Middle East and Europe. The management team and I are excited to continue our partnership with Rhône to build a true global Canadian champion.”

Apax invests in the technology and telecom; services; healthcare; and consumer sectors. The firm has eight offices located in London, New York, São Paulo, Munich, Tel Aviv, Mumbai, Hong Kong and Shanghai (www.apax.com).

Rhône Capital is a global private equity firm with more than €3 billion under management and a focus on private equity investments in businesses with a pan-European or transatlantic presence.  Sectors of interest include business services, chemicals, consumer products, food, industrial, materials, mining, and shipping.  The firm is currently investing capital from its €2.6 billion fifth private equity fund which was raised in July 2015. Rhône was founded in 1995 by Robert Agostinelli and Steven Langman and has offices in London and New York (www.rhonegroup.com).

Closing of this transaction is expected to occur before the end of July 2017.

© 2017 Private Equity Professional | March 27, 2017