Big buy, another new region in store for ASG?

CapitalSource leads deal, brings in three new lenders
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Wednesday, April 3, 2013

BELTSVILLE, Md.—Anticipating new acquisition opportunities, ASG Security last week closed a deal to increase its credit facility by $20 million, to $270 million. And it has the opportunity “to increase the facility by another $30 million,” ASG CFO Ralph Masino told Security Systems News.

Joe Nuccio, ASG CEO, said ASG “wants to be prepared.”

“2013 is different from 2012. The election is over and things are starting to settle down. There are some [acquisition] opportunities that did not come to market in 2012 that could possibly come to market in 2013,” he said.

Nuccio declined to be more specific, saying new purchases may involve ASG opening a new region or beefing up current regions.

Led by CapitalSource, which has worked with ASG for close to a decade, the new facility includes three new lenders.

“The new lenders are CapitalOne, TD Banknorth and Bank of Oklahoma,” Will Schmidt, CapitalSource managing director, told SSN. “We thought it was a great time to bring those folks on, [all of whom] know ASG well and understand the security space.”

The super-regional is generally very acquisitive, but this year its “acquisition pipeline is as full as it has ever been,” Masino said. In fact, ASG has already made two unannounced tuck-in acquisitions since the beginning of the year, he said.

Less than one year ago, ASG upped its credit facility from $230 million to $250 million.

It had a busy 2012, opening a new region in Louisiana in November and closing out the year with a four-acquisition shopping spree

While ASG increases its RMR through acquisitions, 70 percent of its growth is internally generated, Masino said. Currently ASG has about $8 million in RMR; Nuccio predicted that ASG will end 2013 with just under $9 million in RMR.

The company has had quick success with its hosted video offering and its new region in Louisiana has hit the ground running. “The actual organic monthly sales, from the day we bought it to what is today … has doubled,” Nuccio said.

There are now nine lenders involved with ASG’s credit facility. “ASG has done remarkably well. It’s a sought-after credit … we were oversubscribed for the increase,” Schmidt said.

“The credit market is strong right now. This industry generally and ASG [specifically] is seen as very safe and reliable by the senior debt market,” Schmidt added.