Devcon secures $215m credit facility
HOLLYWOOD, Fla.—Devcon Security, a super-regional that has rapidly expanded into a national player in the past year, yesterday announced a new $215 million credit facility that includes $110 million in new financing. The new financing package more than doubles what was available to the company previously.
“We’re ecstatic,” Robert Farenhem, president and CEO of Devcon, which is based here, told Security Systems News.
“This is a fairly substantial increase in availability over where we’ve been, and it has been designed in order to allow us to execute our growth strategy without worrying about senior bank debt limitations for the next couple years,” he continued. “It’s a huge shot in the arm for us, and also very encouraging that we have support from truly great partners on the senior debt side.”
The financing was led by CapitalSource Finance, Devcon said in the July 12 announcement. Farenhem told SSN it replaces a $105 million facility Devcon previously had with CapitalSource.
CapitalSource director Will Schmidt told SSN that three other lenders also are involved in the new facility: The PrivateBank, Bank of America and CIT. All three are new lenders to Devcon, Schmidt said.
“We found a lot of interest among the capital providers to the industry because it’s a very strong performing company with a well-thought-out, exciting growth plan,” he said. “The acceptance in the market was a strong vote of confidence [for Devcon].”
He also said there’s an opportunity for expansion of the facility. “We believe there’s additional capacity to grow the facility … So, as they grow, we expect that this facility will continue to grow with them,” Schmidt said of Devcon.
San Francisco-based Golden Gate Capital acquired Devcon in 2009. Since then, Devcon said in its announcement, the company has expanded from nine branches primarily in Florida and New York to more than 50 branches nationwide. “Devcon continues to staff these branches with local security experts, most of whom have spent years in the industry and are leaders in their field,” the company said.
Doug Bayerd, Golden Gate VP, said in a statement: “We remain excited by the long term prospects of the business.”
Devcon has two central stations, one here and one in New York City, and 140,000 accounts. It had 450 employees last October and now has 785. The company in June also announced it was rebranding, with a new logo and revamped web site.
Farenhem said Devcon currently has 51 branches and expects to open the 52nd by the end of July.
The company has not set a limit on the number of branches it expects to open, he said.
“It is open-ended,” he said. “We believe that the footprint we’ve established in the first six months of this year does give us national coverage, and from this point we will expand into markets that make sense for us given the opportunity in those markets for growing the customer base.”
In the meantime, he said, “A lot of hard work is going to be next, as we create customer density in all our markets and focus on the day-to-day work of providing great customer service and growing our account base.”
Schmidt said this new facility is positive not only for Devcon but for the industry as a whole.
“This transaction is another example that the security space is a space that the senior debt providers look very favorably upon, and if you’ve got strong top-tier kind of metrics like a Devcon, then the access to capital is certainly there,” he said.