Gen3 Capital acquires two surveillance integrators

NORTHFIELD, Ill.--Generation3 Capital, a private investment firm founded by veterans of the security and custom electronics industries, announced in late January the acquisition of a controlling interest in Avrio Group Surveillance Solutions, of Easton, Md., a systems integrator focused on the IP-based surveillance industry. The buy, completed in partnership with WF Security Fund, L.P., an affiliate of Waveland Investments LLC, follows the May 2008 purchase of RMS Technology Solutions, another integrator working in the IP surveillance space, based in Buffalo Grove, Ill.

“Avrio and RMS represent to Generation3 Capital the top two players in the wide area wireless video surveillance space,” said David Coleman, one of the Generation3 principals. He said the “wide area” market - those customers who have security needs that cover multiple buildings and outdoor space, such as municipalities, university campuses, mass transit, and critical infrastructure - is “very interesting to us because of its size, growth rate, source and amount of funding, and its high barrier to entry. A very high level of expertise is required for these large-scale all-wireless systems to perform up to the expectations of the end user.”

RMS and Avrio have been involved in some very high-profile integration projects, including Chicago's 200-square-mile wireless surveillance system, Denver's surveillance system used to protect 2008's Democratic National Convention, and the recent Presidential Inauguration.

Management at Avrio will remain with the company, including Mark Jules, president of business development at Avrio. Coleman called the RMS and Avrio management teams “among the most talented people in the industry. They're critical for the future of the company.”

Generation3 intends, said Coleman, to use its background and expertise to grow RMS and Avrio, and “once they're large enough, they'll be more attractive acquisitions for large companies in the space who have track records of being successful integrating companies.” Jim Coleman, David's father, founded Coleman Cable in 1990, sold that, then founded Genesis Cable in 1996, which was acquired by Honeywell, for who Jim most recently ran business development at Honeywell Security Group. David Coleman was most recently running Honeywell Custom Electronics. Third partner Bill Vranek ran operations for Honeywell Cable, and the fourth, Brandon Nagler, comes from the financial industry.

Coleman said to look for further investments in the security space, custom electronics, energy management, and other similar markets. “The biggest qualifier,” he said, “is whether we can add value, rather than just be an investor.”