Lots of deals done at Capital One

Envysion and Vyanet are latest transactions
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Wednesday, February 13, 2013

BETHESDA, Md.—Capital One announced Feb. 12 that it closed two new transactions—one with Envysion, a managed-video-surveillance-as-a-service provider based in Louisville, Colo., and a separate $20 million deal with full-service security company Vyanet Security of Bend, Ore.

The Vyanet deal is a three-year, $20 million revolving line of credit. Capital One also provided a senior revolver for Envysion, but would not disclose the amount of the line of credit. Capital One was also involved in a recently announced Interface deal, where it provided a $45 million line of credit.

Not including Envysion and Interface, which closed after Jan. 1, Capital One completed six transactions—ranging from $5 million to $25 million—in the closing months of 2012.

“We had a very busy second half of the year,” Bill Polk, managing director for Capital One Commercial and Specialty Finance Security group, told Security Systems News. “The momentum will continue in 2013,” added John Robuck, senior director, commercial and specialty finance, Capital One Bank.

Capital One worked with Parthenon Capital Partners on the Envysion deal. Founded in 2006, Envysion’s CEO is Matt Steinfort, who also invested, with Parthenon, in the deal. The capital will be used to grow the company and to provide liquidity to certain shareholders.

Andrew Dodson, partner at Parthenon Capital Partners, said Parthenon, which is an investor in ASG Security, was impressed with Envysion’s growth.

“Their growth has been north of 50 percent annually for the last handful of years,” Dodson told SSN. “It’s been almost exponential, which is a testament to the quality of the team and the technology and the adoption of the technology by some real name-brand customers.”

Envysion integrates its own MVAAS system and is deployed in thousands of locations across the United States and Canada. The company focuses on the QSR, retail, convenience store and cinema vertical markets.

In 2012, it added Popeye’s Louisiana Kitchen, Chick-fil-A, Big Lots, Murdoch’s, and many wireless dealers to its customer base, Steinfort told SSN.

Steinfort said his customers are looking for “more and differentiated services to support the myriad cross-functional ways they use our service.”

Envysion’s customers are eager to “know more about their customers and [need to know more about] the daily operations of their [own] businesses to maintain an advantage in this very competitive industry.”

Increasingly, retailers will need to integrate “new data with video, be able to quickly slice and dice the data to gain insights into individual areas of responsibility, and have greater access to this information. Simultaneously, retailers will look to simplify and consolidate their technology platforms so that more people in the organization can use them,” Steinfort said.

He predicted that more retailers will look to platforms like Envysion’s “that offer total integration to all store systems and give users control over all aspects of the store in one easy-to-use application.”

In fact, Steinfort said he believes that “inevitably all multi-unit businesses, regardless of industry vertical, will expect to use video-driven business intelligence as a strategic management tool to drive operational results.”

As a result, Envysion is “always scanning the market for additional verticals where we can add value,” he said.

Envysion will invest the new capital in all areas of the company including sales, development, product and support.

While Envysion does all of its own installation today and for the foreseeable future, Parthenon’s Dodson said it’s possible that Envysion could partner with large security providers such as ASG, ADT or Protection 1 down the road.

Capital One’s Polk said that companies like Envysion that take advantage of cloud technologies and effectively harness data illustrate how “large tech trends are working their way into security.” And these kinds of companies are “driving a lot of investment in this sector,” he added.

Other successful traditional security companies are also driving investment in the industry, he said.

Vyanet does fire, burg, access and video for more than 16,000 customers split about 60 percent residential and 40 percent commercial. It does business primarily in resort areas of Arizona, California, Hawaii and at its home base in Oregon.

The revolver “is intended to be growth capital for them,” said Capital One’s John Robuck. “[They’ll do] organic account creation as well as tuck-ins and they’ll buy some operating entities as well.”

“If they want a beachhead into a new area, they’ll acquire a company and then build and backfill around it,” Robuck said.

Capital One also provided treasury management and Capital One commercial cards to Vyanet as part of the deal. “A bank like Capital One can bring a full suite of services,” he said.