Allco secures Signature for AU$145m

The Sydney-headquartered private equity firm has bought the third-largest security services business in Australia and New Zealand.

Listed Australian private equity firm Allco Equity Partners (AEP) has acquired security installation and monitoring company Signature Security Group from Canadian merchant bank, Clairvest.
 
Sydney-based AEP paid AU$145 million (€90 million; $109 million) to acquire 100 percent of Signature Security Group, according to a filing on the Australian Stock Exchange. The consideration included AU$40 million from AEP’s cash reserves and AU$105 million to be funded by Signature, including a mezzanine facility from major shareholder, AMP Capital Investors.
 
Clairvest said it expects to realise C$29.7 million (€21 million; $25.5 million) from the transaction. Signature has been a portfolio company of Clairvest since 1997.
 
According to reports in the Australian press, the purchase price represents approximately 5x Signature’s EBITDA. The transaction is expected to complete in the next fortnight.
 
“Signature’s growth in the past has been constrained by limited re-investment in the business owing to varying appetites amongst its previous owners for committing additional capital to it,” said Peter Yates, managing director of AEP, in a release. “The security market offers opportunities to acquire customers and consolidate existing businesses.”
 
AEP said that Signature’s current senior management team will remain with the business under its ownership.
 
New South Wales-headquartered Signature is the third-largest supplier of electronic security services in Australia and New Zealand and has approximately 18 percent market share, according to AEP. The company’s services include the installation, monitoring, maintenance, sale and leasing of electronic security equipment to residential and commercial customers.
 
AEP is currently pursuing a hostile takeover of paint maker Wattyl after a second bid of AU$275 million in late December was rejected by the company. Yates said in a statement: “The AEP offer provides full value to Wattyl shareholders, and the prospect of an alternative buyer is remote. As well, Wattyl’s restructuring efforts still entail significant risk and there is no certainty of achieving the desired results.”