SAFE recapitalizes

GE Capital sells SAFE Security interest to RC/Fontis Partners
Monday, June 1, 2009

SAN RAMON, Calif.--SAFE Security on April 20 announced private equity firm Rustic Canyon/Fontis Partners had purchased GE Capital’s entire stake in the company. Bank of America provided a $25 million senior credit facility as part of the transaction, and Salt Lake City-based investment bank Seare Marriott & Co. served as financial advisor. RC/Fontis has also invested an undisclosed amount of new equity capital in SAFE, and while the firm has assumed a majority ownership position, SAFE president and CEO Paul Sargenti will remain in his position with a significant ownership interest.

According to Sargenti, the new infusion of capital positions SAFE well for the future. “We’ve been with GE Capital, first as a lender and then as a lender and a partner, for 10 years,” said Sargenti. “We were able to refinance and recapitalize the company with GE’s consent as they wanted to exit the security space.”

GE Capital said it preferred not to comment on the transaction.

Industry observer Les Gold of law firm Mitchell Silberberg & Knupp, LLP hailed the transaction as a positive sign. “I think the opportunity is still there. I think business is good, and I think business is going to get better.”

RC/Fontis general partner Gabrielle Greene says the time was right for an investment in the security industry and SAFE Security was the right fit. “This is the first investment for us in [security], and this company had one of the strongest management teams we’ve come across,” Greene said. “There were a number of things that attracted us. One is that it is very attractive from a financial perspective. The combination of the predictable recurring revenue and the fact that that revenue is quite profitable - in any environment, really - but particularly in this environment.”