French firm buys another Phila. co.: $670M+debt for AlliedBarton
Sales up as Wendel buys from Blackstone
Wendel, a family-owned, Paris-based investment firm, says it has agreed to pay Blackstone Group $670 million in cash for 96 percent of AlliedBarton Security Services, the Conshohocken-based outsourcing giant. AlliedBarton employs around 55,000 guards and other workers (6,000 around Philadelphia). Many are members of the Service Employees International Union. They work at 200 of the Fortune 500 corporations, and 3,000+ other landlords and tenants. (Wendel is also 11.7% owner of Saint-Gobain, the French building-products maker whose U.S. headquarters is near Malvern. Earlier versions of this item wrongly said Wendel was 'the owner'.)
Wendel also agreed to take over $990 million in AlliedBarton debt, Wendel spokeswoman Caroline Decaux told me, boosting the total consideration to $1.67 billion. Blackstone paid $750 million all-cash for AlliedBarton in 2008. As owner, Blackstone "benefited from the run-up in profitability," as well as the "significant turnaround in the capital markets" that allowed AlliedBarton to borrow and expand, Andy Greenberg, principal at Fairmount Capital Partners and GF Data Resources, told me. AlliedBarton managers, led by chairman and CEO Bill Whitmore, will control the other 4 percent of shares.
AlliedBarton says sales totalled $2.18 billion last year. Clients include 200 of the Fortune 500 and more than 3,000 other landlords and tenants. Earnings (before interest, tax, depreciation/amortization) were $148 million. Wendel says its price is 11.6X AlliedBarton's free cash flow. The deal is expected to close at year's end.
AlliedBarton is highly-profitable, fast-growing and "well positioned to continue to grow, both organically and through acquisitions," Frédéric Lemoine, Chairman of Wendel's Executive Board, said in this statement. AlliedBarton bosses "look forward to working with Wendel" and its "long-term" growth philosophy, added AlliedBarton boss Whitmore.
Blackstone, one of the largest U.S. private-equity firms, paid $700 million in cash, plus up to $50 million in performance bonus, to buy AlliedBarton from previous owner Ronald O. Perelman's MacAndrews & Forbes holding company in 2008, when revenues totalled $1.5 billion and EBITDA was $89 million (though net profits were marginal).
Perelman had purchased what is now AlliedBarton, which included the former Allied Security and SpectraGuard, among other companies, in 2003 for $263 million, when sales were about $500 million. SpectraGuard was founded by former Flyers owner Jay Snider in 1980.