Stirling Square bolts on Austrian firm to 3SI

Stirling Square Capital Partners, a mid-market buyout firm backed by Citigroup, has moved to consolidate the financial security market by making a European bolt-on acquisition for portfolio company 3SI Security Systems.

Stirling Square Capital Partners, the Citigroup-backed mid-market buyout firm, has completed a European bolt-on acquisition for portfolio company 3SI Security Systems, as private equity interest in the electronics of transaction services shows no sign of diminishing.

3SI, which makes electronic security systems that are used to guard cash, has acquired Austrian firm ECA Horst Kriechbaum, a smaller rival, for an undisclosed sum.

3SI is the leading global manufacturer of cash protection systems, supplying more than 90 percent of the top US banks and more than half the top European banks. The firm has offices in the US and Europe and has 185 employees. Stirling Square bought the business from American Capital in March last year, in a deal that involved an $84 million financing package from debt provider Allied Capital.

ECA, which provides other related security services to banks, is intended to help 3SI broaden its product offering and increase the pace of its expansion in Europe.

Stirling Square partner Bolaji Odunsi said: “Both businesses have strong client bases and enviable patented and proprietary products. We see great potential for the combined business.”

Stirling Square, which launched in 2002 with a cornerstone investment from Citigroup, is currently spending a $280 million fund. The firm claims to specialise in complex cross-border transactions.

In recent months private equity firms have largely been focusing their attention on a related area of transaction services, the electronic payments space. KKR bought First Data for $29 billion in one of the largest ever buyout deals, while Blackstone picked up Alliance Data for $7.8 billion, Warburg Pincus acquired Megavante for $625 million, and AXA Private Equity recently bought Welcome Real-Time.