Private equity group scoops up Protection One Europe

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Tuesday, July 1, 2003

TOPEKA, Kan. - Only a few months after Westar Energy announced plans to put Protection One on the block, its subsidiary, Westar Industries, has found a buyer for its stake in Protection One Europe.
The sale of Protection One Europe to two investment funds managed by ABN Amro Capital France is expected to help reduce the consolidated debt level for Westar Energy by $114 million.

The sale, which is expected to be completed by this month, is contingent on French and German antitrust approval.

“In some quarters of the industry there was some feeling that the European piece would go with the main part of Protection One in the United States,” said Jack Mallon, managing director of Mallon Capital. “But on the other hand, the company was not obligated to keep it intact.”

What makes this deal unique, said Mallon, is the buyer is a private equity fund instead of a strategic buyer from the security industry.

Protection One Europe, however, is not alone in terms of being owned by a private equity group. Canadian alarm companies Voxcom and Protectron are also owned, in some part, by private equity investors, while Tri-State Alarm of Upper Darby, Pa., received an infusion of cash when two venture capital firms bought a 54 percent interest in the company early last year.

By early 2004, Westar Energy expects to have a buyer for Protection One’s U.S. business. Potential buyers of the alarm company are being contacted, with non-binding bids due by the middle of this year, according to details released during Westar Energy’s annual shareholders meeting in June.

Westar Energy officials said the sale of Protection One Europe is yet another step toward returning it to a pure electric utility company. Last July, the company quietly sold its Protection One Canada business to Protectron. That operation served 40,000 accounts in Ontario and British Columbia through three offices and two central stations.

Though exact numbers were not available on the size of Protection One Europe, the Vitrolles, France-based company reportedly employs 800 people. Its service area includes France, Germany, Belgium and Holland.

Officials at ABN Amro could not be reached for comment by press time.