SDI secures investments from LLR Partners, Monument Capital Group

CEO Gupta says SDI gets dry powder for acquisitions and a brain trust out of the deal
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Wednesday, June 13, 2012

CHICAGO--When David Gupta, CEO of systems integrator SDI, began discussions with private equity firms, he was looking for capital of course, but he was also looking for a firm with specific expertise.

Gupta recently secured investments from LLR Partners and Monument Capital Group in a deal that he says brings with it ample dry powder for acquisitions as well as access to a brain trust of international security experts.

"I really wanted a firm that could partner with me [to help us reach] our long-term objective of fully building out our national footprint and [expanding overseas]," Gupta told Security Systems News. "Now we have the capital and the contacts to help us get there."

Gupta would not disclose the exact amount of the investments, announced June 6, but said that LLR's typical investments are "in the $15 million to $150 million range." This investment is from an $800 million fund. "They are fully committed to this," he said.

SDI is a $40 million integrator with 130 employees and 50 contractors, mostly technicians and installers. It's primarily known for its work in airports, although it does government work, transportation, education, real estate companies and utilities.

LLR “very much understands the business processes of our firm,” Gupta said, “and what it means to be a services firm that does work for government.”

Likewise, Monument Capital Group “understand[s] the nuances of physical security and the nuances of security in foreign governments,” he said. “And they have a phenomenal advisory board that we will have access to that will help us grow internationally.”

Washington-based MCG was founded by former Carlyle executive Robert Dunn, and former White House Special Assistant Douglas Baker. Its advisory board includes James A. Baker III, former secretary of State and former Treasury secretary; former Secretary of Defense Frank Carlucci; Mustafa Koc, chairman of Turkey’s largest conglomerate, and Thomas McLarty, former White House chief of staff.

SDI, which is based here, has a significant presence in Los Angeles, Washington, Denver and the Caribbean and a growing presence in Latin America. It’s eyeing Europe, the Middle East and Asia as growth areas, Gupta said.

It does complex installations including PSIM systems, video surveillance, ID badging, computer-aided dispatch, LPR and a variety of perimeter security systems. It has an entire IT division and, in addition to advising clients on physical security, “we understand how to move data around,” Gupta said.
 
“We understand how to talk to a CIO and how to implement complex systems [including the network itself],” Gupta said. This is a capability that was of great interest to the PE firms, he said.

SDI works with a number of vendors—among them NICE, Vidsys, Verint, Cisco and EMC—but emphasized: “We will not be a VAR for anyone. That allows us to be an honest broker for our customers.”

In its 20 years, SDI has enjoyed 10 to 12 percent increases in annual revenues. Gupta said he expects SDI to complete an acquisition within the next quarter.