Finance firm scoops up SLP Capital

Thursday, April 22, 2004

April 22, 2004

ST. LOUIS - Commercial finance firm CapitalSource has bought one of the most well-known names in financing for the security industry, acquiring SLP Capital in early April.
The sale follows a management change at SLP Capital, with former co-founder Henry Edmonds leaving the firm last year, and a liquidity issue in the security market. In recent years a number of finance companies for the market, including ADT Security and MCG Capital, either changed their financing scope or all together left the industry.
For SLP, the acquisition "came at the right time for us," according to Bill Polk, president of SLP Capital, a firm that has placed more than $400 million in capital for hundreds of alarm companies since its inception in 1991.
The transaction not only represents opportunity for SLP Capital and Embrasure account management software, but also for alarm companies, as well. CapitalSource, a $2.5- billion market cap company, intends to broaden its financing scope in the security field as a result of this transaction
"We intend to be a big player in this market and be a consistent player in this market," said Mike Szwajkowski, managing director of CapitalSource in New York.
Traditionally SLP's loans ranged from $300,000 to $15 million, but the company's sweet spot was between $2 to $5 million, said Polk. CapitalSource, however, has the financial resources at its fingertips to fund transactions up to the $50 million mark.
"To provide that kind of financing capital, SLP had to be part of a larger organization with that kind of balance sheet," said Polk.
For more on this story see the May issue of Security Systems News.