A GardaWorld truck near the company's Mississauga headquarters in 2021.Fred Lum/the Globe and Mail
GardaWorld Security Corp.’s top executives are taking majority control of the Canadian company in a deal valued at $13.5-billion, eyeing dramatic growth in the years ahead.
The private security firm’s founder and chief executive, Stephan Crétier, is leading a group of managers in buying a controlling stake in GardaWorld currently held by British private equity firm BC Partners, the companies said in a news release Monday. The GardaWorld executives will hold roughly 70 per cent of the equity when the deal is finalized, while a band of minority investors led by New York-based HPS Investment Partners will hold the remaining interest.
Oak Hill Advisors and One Investment Management are also buying in, while BC Partners will stay invested with a smaller position. No other financial information was disclosed about the deal, which those involved are calling the largest private buyout in Canadian history.
“This sends a message that we’re continuing to invest in this business,” Mr. Crétier said in an interview. “We’re just in the second inning here. There’s a generation at GardaWorld that wants to continue doing what we’re doing.
“So it was important that we’re bringing what I would call sophisticated investors, global investors that can help us, continue to support us, bringing this business to the next level.”
The deal marks a new chapter for Mr. Crétier, who sold his car and took out a second mortgage to start GardaWorld in 1995. The founder later took the company private with Rhône Capital in 2012 before BC Partners bought out Rhône in 2019. In that transaction, the recapitalization valued GardaWorld at $5.2-billion, with BC Partners owning 51 per cent of the equity, while Mr. Crétier and his management group held 49 per cent.
As a result of escalating conflict in several parts of the world and criminal entities becoming more sophisticated, demand for security services continues to grow – and so does the complexity of the tasks involved. GardaWorld has doubled annual operating profit to more than $1-billion during BC Partners’ ownership, according to Monday’s news release.
Three years ago, GardaWorld tried to buy British-based rival G4S PLC, the world’s largest security company, but abandoned the pursuit. Mr. Crétier said at the time that his company had better and less risky opportunities elsewhere.
The strategy since then has been to “go deep” on the types of work it does best and build on those capabilities through smaller acquisitions, Mr. Crétier said. The CEO said the company has been “totally transformed,” expanding its artificial intelligence-enabled services, including event and travel risk management as well as remote and virtual surveillance.
GardaWorld has a business intelligence unit called Sesami that does cash management for several big banks in North America and Europe. The company’s Crisis24 unit protects seven of the 15 wealthiest individuals in the world, both through people, intelligence gathering and AI software, Mr. Crétier said.
Last week, the Montreal-based company announced a deal to buy Dallas, Tex.-based Stealth Monitoring, a provider of mobile and fixed video monitoring systems. Terms of the purchase weren’t made public.
GardaWorld’s “ability to evolve with the rapidly changing security needs of the world’s leading companies positions it well for continued success,” said Scot French, a governing partner at HPS. “We are excited to expand our long-standing partnership with the team as they continue to build on GardaWorld’s strong momentum.”
The current transaction is subject to standard closing conditions and expected to close by the end of February, according to the news release. The deal will not change GardaWorld’s debt levels and will not involve any financing at the level of the company or its subsidiaries, the release says.