Monroe Capital takes a look at security

Tuesday, September 18, 2012

CHICAGO—Monroe Capital, a private investment company that has about $700 million in assets, does not currently have investments in the physical security space, but it’s interested in taking a look, Monroe managing director Zia Uddin told Security Systems News.

While Monroe is more actively looking at IT security companies, Uddin said, “we do look at those [physical security] deals and we would be open and willing to make an investment. We understand the business model and dynamics of the industry.”

“Our sweet spot is companies with $3 [million] to $10 [million] or $12 million in EBITDA, though we’ve done deals higher and lower than that,” Uddin said.

Monroe has investments in adjacent security spaces, companies that do work in defense, aerospace and cyber security, though “we’re not set up in pure industry silos, we’re more core-economy-type guys,” Uddin said.

“What we see in the [physical security] space is an opportunity for consolidation and roll up … that we understand well,” he said.

Manufacturers or integrators that want “to buy out a product line, [or] buy out the competition, if they have a good management team, those are the guys we love to hear from,” he said.

Uddin said Monroe Capital is able to do senior debt and mezzanine financing together. “There’s less brain damage. [The clients] only have to deal with one party. … [They don’t have to deal with] two parties, two due diligence, two lawyers’ fees.”