Investment firm buys Consolidated

Former majority owner of Allied Security, Gryphon Investors has history in the industry
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Friday, April 1, 2005

IRVINE, Calif. - Consolidated Fire Protection found itself under new ownership the first week of March as Gryphon Investors, a San Francisco-based investment firm, purchased the full-service fire company from Caltius Private Equity Partners and Westar Capital.

The move marks a return to the market for Gryphon Investors, a firm that owned a majority stake in Allied Security for five years before selling it in 2003.

The deal was completed in partnership with company management - President Steve Shaffer and Chief Operating Officer Keith Fielding - and also included Jerry Rose, former vice chairman of Jones Lang LaSalle, and Jim Didion, former chairman and chief executive officer of CB Richard Ellis. Financial terms of the deal were not released.

Gryphon plans on injecting capital into the fire and life safety company to allow the company to continue with its current business strategy.

“There are a couple things we’d like to see happen,” Nick Orum, partner with Gryphon, said. “We would like them to continue their healthy growth and extend their national account program. We will also provide capital to open new offices over time.”

According to Orum, the timing was right for the firm to return to the security space and Consolidated Fire Protection represented the company to make that move.

“There is increased general interest in the sector with respect to fire and life safety,” Orum said. “We were attracted to Consolidated Fire Protection because they are the leading independent company in the industry and they have a large market share in California and the Northwest.”

Orum said the firm was also drawn to the company due to its potential for success in a variety of arenas.

“We believe that the commercial real estate and construction activity will continue to grow in volumes in the coming years, which helps the installation part of the company.” Orum said.

Consolidated, which recorded 2004 revenues of more than $100 million and employs approximately 600, also operates through its Cosco and Firetrol subsidiaries in markets across the western United States, offering design, installation, inspection and repair of fire safety systems.

According to Kyle Flynn, associate at Caltius Private Equity, the sale, which was originally initiated by an investment banker Consolidated Fire Protection retained in August 2004, stemmed from the desire to offer the company additional capital to grow, something Caltius could not provide.

“The facility management market is booming and the company is well positioned to take advantage of new opportunities,” Flynn said.