In one of the biggest private-equity acquisitions in Canadian history, U.K.-based BC Partners has snapped up a majority stake in Montreal security giant GardaWorld Corp. in a deal worth $5.2-billion.
The acquisition, which is expected to close by late 2019, will give BC Partners 51 per cent of the company. GardaWorld chief executive Stéphan Crétier and other members of the management team will own the remaining 49 per cent.
BC Partners says it is the biggest buyout of a private company by a private-equity investor in Canadian history.
GardaWorld’s growth has been fuelled partly by the expanding global demand for security services. “We all see what’s happening in the world, and, unfortunately, the social-political tensions are creating a need for security services,” Paolo Notarnicola, lead deal partner for BC Partners, said in an interview.
Mr. Notarnicola said the sector has been growing faster than GDP – in the mid-single digits in developed countries, and in the high-single digits in developing countries.
Mr. Crétier, formerly a baseball umpire, founded GardaWorld in 1995 with a second mortgage of $25,000 on his home in Laval, Que. Today, the company employs more than 92,000 people and provides security and cash services to institutional clients such as companies, governments and universities in 46 countries across North America, Africa, Asia and the Middle East.
GardaWorld went public on the Toronto Stock Exchange in 2003, then was taken private in 2012 through an investment by London-based private-equity investor Apax Partners LLP. In 2017, Apax sold its equity to Rhone Capital, which is now selling the stake to BC Partners.
The company’s management has been steadily increasing its ownership stake, from 26 per cent when GardaWorld went private to 49 per cent today.
“There’s really a culture of ownership here,” Mr. Crétier said told The Globe and Mail in an interview.
The deal with BC Partners will allow GardaWorld to continue its growth, both organically and through acquisitions, Mr. Crétier said.
“It’s all about being opportunistic,” Mr. Crétier said, noting that the company is still growing 10 per cent a year in Canada. “We really look at entering markets where we know we are going to become number one in four or five years.”
In February, the company announced it had made $795-million to $805-million in revenue during its fourth quarter.
Although the deal is the biggest private-equity funded buyout of a private Canadian company, Refinitiv said it ranks third in terms of all buyouts in Canadian history. The largest was the 2014 acquisition of Tim Hortons by 3G Capital’s Burger King for $12.5-billion. The second biggest occurred in 2006, when Fairmont Hotel & Resorts was taken private by Colony Capital for $6.07-billion, Refinitiv said.
Barclays and TD Securities acted as financial advisers to GardaWorld, while BC Partners was advised by Scotia Capital.
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