Worldwide is latest ‘search fund' acquisition deal
NEW YORK—The purchase of Worldwide Security by Novidam Capital Partners is the latest example of a “search fund” acquisition deal, a specialized finance model that brings entrepreneurs into the security industry.
Worldwide, an $8.2 million full-service security company, was acquired by Novidam Capital, a search fund, last month.
Former Worldwide CEO Ken Mara is retiring and Novidam’s Alexander Schuil is now CEO of the company, which has been renamed Worldwide Security Group.
“In the search fund model, searcher-entrepreneurs are backed by experienced investors to search for, acquire and manage for the long term, one private company. In the model, the searcher-entrepreneurs look for businesses in industries of their choosing, and, if a deal comes to fruition, become CEO of the acquired entity, forming a true succession solution to selling owner-founders,” Schuil explained to Security Systems News.
Novidam Capital was formed in 2014 for that purpose. Other security companies that have been acquired by search funds are UCIT, a video monitoring company, and VRI, a PERS company, according to Henry Edmonds of The Edmonds Group, a specialized investment bank. The Edmonds Group advised Worldwide in the transaction.
Worldwide has “been a very successful business, and it will be a nice platform for Alex to move [the security company] from an entrepreneurial business approach to a more structured professional business approach,” Edmonds said.
Schuil said he was drawn to Worldwide’s 36-year history, its mix of residential and commercial customers, its “well below-average attrition rate and its non-concentrated dense account base in the New York City metro area.”
Worldwide has $465,605 in RMR, 24,500 customers, 54 employees and two offices, one here on Lexington Avenue and one in Garden City, N.Y.
Current growth for the company “comes from word-of-mouth mostly,” Schuil said.
Schuil is in the process of formulating a growth plan, which involves taking “some time to discover what we’re really good at and where/how we want to grow.”
Worldwide is strong in burg and fire and is currently ramping up its access control, video and interactive services. “Those are areas where we will continue to focus. Also, our in-house central station can do much more cool things,” Schuil said.
“Combining our residential and commercial expertise, I do see a sweet spot in the smaller multi-family residential buildings in New York City and Long Island. The company recently opened an office in New York City, where we intend to better service our key hotels and office buildings, and, with new sales people there, generate further new business,” Schuil said.
Key to Worldwide’s growth will be its employees. “We have an amazing group of talent, spread over diverse areas, technical, managerial and support.”
Schuil called his CFO “the best in the business” and noted that his CTO, Joe Cestra, was one of Security Systems News Class of 2015 “20 under 40” award winners. Other key managers are equally talented, he said.
However, Schuil said “the rest of the staff is even more important than the key managers and myself, as they have the experience and have shown enthusiasm from the day we closed this deal. With our current staff, and over time some new people, the goal is to create a place for long term careers—not a place for jobs. Damn the torpedoes, full speed ahead,” Schuil said.