Imperial Capital, OPTrust investment values Ackerman at $150 mln

Canadian private equity firm Imperial Capital Group and OPTrust Private Markets Group have again joined forces, this time to complete an investment in Ackerman Security Systems, a U.S. home alarm monitoring specialist.

A person with knowledge of the deal told peHUB Canada that it values the company at about US$150 million.

Headquartered in Atlanta, Georgia, Ackerman has for close to four decades been a provider of security system design, installation, servicing and monitoring to residential and business customers. With a subscriber base of roughly 120,000, the company serves customers in Georgia, the District of Columbia, Maryland and Virginia.

Ackerman taps into a market that is showing exceptional growth. Concerns about crime have powered a 9.1 percent compound annual growth rate in the global home security solutions market, a 2014 report estimated. By 2017, the global market’s size is expected to reach US$34.5 billion.

A broad array of services has emerged as part of this expansion, along with accelerating prices, said Imperial Capital Partner Glen Silvestri. He believes Ackerman is positioned to become an upstart provider in new markets to consumers who are looking for better value.

“Ackerman’s business model makes it uniquely able to deliver similar if not better services at a lower price point,” Silvestri said. “Where security systems exist, Ackerman can save customers 25 percent to 50 percent per month. We believe that gives it significant differentiation and opportunities to grow beyond its existing base.”

Imperial Capital and OPTrust partnered in the deal with Ackerman’s management team, which has taken “a significant equity stake,” said Silvestri. Led by CEO Jim Callahan, the team comprises “unbelievable executors” who have driven the company’s expansion “by leaps and bounds” over the last 10 years, he said.

Silvestri said Imperial Capital will support Ackerman’s next phase of growth by focusing on strategic opportunities and by identifying target cities and regions in which it can effectively compete.

Ackerman is Imperial Capital’s second collaboration with OPTrust, which invests assets of $16 billion on behalf of OPSEU Pension Plan. In 2014, the two organizations completed a $121 million investment in Dental Corp, a network of Canadian dental care clinics.

“OPTrust is always a value-adding partner in the deal-making process,” said Silvestri. OPTrust PMG Co-Head Sandra Bosela and Director Dennis Wallace were on point on the Ackerman transaction.

Ackerman is Silvestri’s first platform investment since he joined Imperial Capital from the PE group of Ontario Teachers’ Pension Plan last July. He said his experience heading Ontario Teachers’ telecom, media and technology investment team gave him the idea to scout out emerging opportunities in the security space.

Silvestri and Partner Ed Truant oversee the business services investment practice at the Toronto-based Imperial Capital. Truant, who has been with the firm since 1997, played a major role in the Ackerman deal, as did Vice President Chris Harris and Analyst Kuba Soltysiak.

Ackerman is the sixth investment of Imperial Capital Acquisition Fund V, which raised $295 million in a final close in late 2013.

Photo of home security concept courtesy of Shutterstock

Photo of Glen Silvestri courtesy of Imperial Capital Group