A private equity consortium comprising Carlyle Venture Partners, Spire Capital Partners and Wachovia Capital Partners has bought the Sonitrol security-systems unit from Tyco International for $125.5 million (€103 million).
According to Carlyle managing director Brooke Coburn, the firms each hold an equal stake in Sonitrol.
Kevin Dowd is taking over as Sonitrol’s chairman and chief executive officer, replacing Chris Cobb, who will remain with Tyco. Dowd most recently served as president and CEO at Checkpoint Systems, a multinational marketer and manufacturer of labeling solutions, where he boosted revenues from $40 million to $700 million and subsequently floated the company.
The deal is part of a restructuring program to reduce debt at Tyco, which is caught in the midst of litigation as two of the company’s former top executives, former CEO Dennis Kozlowski and chief financial officer Mark Swartz, are accused of looting $600 million from Tyco through excessive pay and selling stock at inflated prices.
Sonitrol, which is part of Tyco Fire & Security under the ADT Security Services umbrella, reported revenues of approximately $80 million for 2003. The company is the largest provider of security and fire-protection systems in the world.
Coburn said Carlyle had been eyeing Sonitrol for more than six months, eventually meshing interests with Spire and Wachovia and partnering in the investment.
“Sonitrol is a longstanding brand that just wouldn’t be maximized under the ADT umbrella,” Colburn said. “We’re going to invest in upgrading the technology and putting additional sales resources behind the business. It’s a terrific asset that’s simply been undercapitalized.”
The financial woes of many big corporations are providing ample opportunity for private equity players to take advantage of divestures these days. Just last month, bankrupt Enron sold its Mariner Energy unit for $271.1 million to a private equity group that included Acon Investments and the Carlyle/Riverstone Global Energy and Power Fund II.