ISR Solutions gets $17.5 million infusion

Friday, March 1, 2002

CHANTILLY, Va.-Systems integrator ISR Solutions received a financial boost with a $17.5 million investment from a group of investors, the company's largest cash infusion to date.

The funds will enable ISR Solutions to upgrade internal systems and provide it with the financial resources to expand in the future. It also allowed the company to eliminate debt.

The investment was led by Carlyle Venture Capital, which bought stock in the company. Other participants in the investment round included Fairfax Partners and LHC Corp., a subsidiary of Claneil Enterprises.

"The other rounds were just seed money," said Bruce Gouldey, chief financial officer of ISR Solutions about previous raising of capital, which ranged from $500,000 to $1.25 million. "This gives us the working capital that we need to continue our organic growth. That will mean new offices as our customers require that we have new offices."

The four-year-old company, which was founded to provide security to Fortune 1000 companies nationwide, has grown rapidly in a few short years. It currently does about $52 million a year in business, compared with $17 million just a couple of years ago. The company operates 13 branches, plus its headquarters here.

Gouldey expects the company's growth pattern to continue, especially with the guidance of Carlyle Venture Capital, which now has two seats on the company's board of directors, and Claneil Enterprises, which holds one seat.

"Carlyle has a strong reputation for being able to help companies grow very rapidly," said Gouldey. "We tripled in size the last two years and we would expect to see strong growth through the next few years."

Now with $17.5 million cash infusion, company officials are setting sites on future expansions. Some of that will come from a recently signed partnership with Kiewit Construction Company, one of the largest construction firms in the United States.

As part of the partnership, ISR Solutions will provide physical security to buildings Kiewit constructs, according to John Flanagan, director of marketing and communications for ISR Solutions. It marks the first time ISR Solutions has signed an agreement of this nature, he said.

"We provide a certain expertise that they don't have," said Gouldey. "We provide the security expertise and they provide the people."
The agreement enables ISR Solutions to go after security jobs that cost tens of millions of dollars. Previously, the company would not be able to seek such projects because it lacked the large workforce needed.

"It allows us to scale up," said Gouldey. "We're comfortable doing projects up in the $10 million range by ourselves, but once you get to that size you can't do multiple projects at once."

So far ISR Solutions expects to participate in about 20 projects with Kiewit. Each project, however, will be a separate joint venture.