BS completes first exit since 2006

BS Private Equity’s 2.5 times return from its exit of Sicurglobal, the Italian security service firm, to Stirling Square Capital Partners may provide a boost to the firm’s fundraising plans.

Stirling Square Capital Partners, the European private equity firm, has bought Sicurglobal, the largest Italian security service company, from BS Private Equity, the Italian mid-market buyout firm. Terms were undisclosed, but Francesco Sironi, a BS Private Equity managing partner, said it had made a return of approximately 2.5 times.

The company provides surveillance services, divided into three activities: patrolling and alarm monitoring; guarding; and cash handling. The group has recently branched out into satellite telesecurity and security systems integration and consulting.

BS Private Equity set up Sicurglobal in 2004 by acquiring 18 independent companies from their founders. The firm subsequently made a further eight add-on acquisitions.

The firm brought in new management at the company to attempt to professionalise an industry which has tended to be run by people with non-financial experience in Italy. Sironi said: “The security industry was worse managerially than many other sectors. All of the companies were managed by entrepreneurs, such as former policemen, who set up their own companies.

“This is quite a risky approach [because new management will not have prior experience in a specific niche], so when you put in a new manager you need to control him or her very strictly in the first two or three years of the investment.”

Sicurglobal’s consolidated turnover in 2007 was €165 million ($261.4 million), or nearly double revenues at the time of acquisition. The firm has more than 75,000 customers and 100,000 users, ranging from residential customers to large businesses and public administration organisations.

Sicurglobal operates in 21 provinces in Italy’s Northern and Central regions, deploying more than 2,600 armed guards, 700 vehicles and 23 monitoring centres.

The exit for BS Private Equity is a boost for the Italian buyout firm, as it is its first deal since 2006. The firm had been looking to raise another fund in 2006, as its €550 million fourth fund was 80 percent committed after it bought Motovario, an Italian power transmission producer in October of that year.

Sicurglobal represents a second exit for BS Private Equity from its fourth fund. BS will be looking to exit two more companies before returning to investors for a fundraising once 50 percent of funds have been returned, Sironi said.

One company, Radici Film, is expected to be sold for around €200 million, according to reports in the Italian media.

BS is part of a consortium alongside Ontario Teachers’ Pension Plan and Investindustrial with a 30 percent stake in Ducati. The firm has launched a public tender offer for the remaining shares in the company. Sironi said he expected this bid to use up much of the remainder of BS Private Equity’s present fund.