EQT V sells Securitas Direct to Bain Capital and Hellman & Friedman
EQT V has agreed to sell Securitas Direct to private equity funds managed by Bain Capital and Hellman & Friedman for an enterprise value of SEK 21 billion in cash plus a potential additional payment of up to SEK 0.9 billion.
During EQT’s ownership Securitas Direct has grown its customer base by 45%, sales 13 % and EBITDA 20% per year.
A consortium consisting of private equity funds managed by Bain Capital and Hellman & Friedman has alongside management, agreed to acquire Securitas Direct from EQT V for a total enterprise value of approximately SEK 21 billion and a potential additional payment of up to SEK 0.9 billion conditional on future performance of Securitas Direct.
EQT V took Securitas Direct private from the Stockholm Stock Exchange in 2008 and implemented an aggressive growth strategy and accelerated international expansion. During EQT ownership, Securitas Direct sales have grown on average 13% and EBITDA 20% per year in the period 2007 to 2011. In 2010 sales were SEK 5.51 billion and EBITDA SEK 1.45 billion.
Securitas Direct is the European leader in high-quality monitored alarm solutions for residential and small business customers. It currently has close to 1.4 million customers and is the market leader in almost all markets where it operates.
“In spite of the global financial crisis and ensuing recession in the past few years we successfully managed to implement an ambitious growth and development plan which boosted both the size of the customer portfolio and sales during our ownership period. Focus on customer care and further international expansion were key parts of this process and Securitas Direct is now ready and well equipped for the next phase with new owners at the helm,” said Peter Nilsson, Chairman of the Board.
Between 2007 and today the number of customers increased by around 45 % to almost 1.4 million, helped by strong performance in key markets like Spain, Sweden and Norway as well as a significant growth acceleration in France. In France a more than twentyfold increase in the sales force rendered a doubling of the customer portfolio between 2007 and today.
Substantial investment in continuous product development and a flexible technology platform has also paid off during the period. Product enhancements like MyPages and SMS updates have been launched as part of the new product generation Verisure. Important add-on acquisitions like Hafslund Sikkerhet in Norway and Home Safety in The Netherlands along with a successful market entry in Chile have also widened the group’s geographical reach.
“After some years with both strong growth and significant investments we are now entering a new development phase during which our flexible technology platform will be a key asset for future growth and competitiveness. Entering new markets, also outside Europe, and seizing acquisition opportunities is also on the agenda going forward,” says Dick Seger, CEO since 1997 and who will remain at the helm after the change of ownership.
Securitas Direct offers security services that protect people and property with operations in ten countries. The company was founded in 1988 as a division of Securitas Group but was demerged from Securitas Group in 2006. Securitas Direct provides burglar alarms, assault and panic alarms, smoke detection, security and intruder alarms in the home, maintenance alarm and property protection.
The market can be divided into two segments: traditional bells-only alarms that are not connected to an alarm centre and monitored alarms connected to an alarm centre that relays alerts to security guards and the police. In Europe, around 12–15 million homes and small businesses have alarms, of which 5–6 million are monitored alarms. There is a growing trend for homeowners to choose monitored alarms and current estimates suggest that around 40% of monitored alarms in Europe are residential.
Legal adviser to EQT
Partner Ulf Johansson commented:
"This is a landmark transaction for both EQT and the Swedish market. The private equity market in Sweden has been extremely active with regard to merger and acquisitions since the start of the year, but this deal is an important milestone with regard to private equity held portfolio company exits."