Former HSM owner, GTCR, to buy Pro One. Is Jim Covert getting back into security?

The announcement just came out, private equity group, GTCR is all set to buy Pro One. Does GTCR sound familiar? They were the money guys behind the 2004 purchase of Honeywell Security Monitoring in 2004. That's Jim Covert's HSM, which was sold to Stanley for that record-breaking multiple in Jan. of 2007. As Sam just said to me, "They've had a pretty good experience, buying a security company and selling it for double--they bought HSM $315 m. and sold for $545m." They've also worked with Covert more than once. Here's a quote from a Sept. 2004 Security Systems News story about Covert getting back into the security game.

"Covert and GTCR have a history of working together. The two teamed up in 2001 on the SecurityLink from Ameritech deal, a company that reported $500 million in annual revenue and operated 119 branches. GTCR provided the financial backing and Covert brought the executive management expertise. Within a matter of months, GTCR and Covert turned the business around, reducing overhead costs and consolidating locations. They then sold that installation business, renamed Cambridge Protection Industries, and National Alarm Computer Center, a California central station, to Tyco for $1 billion."

Do you think Covert's getting back into security again? Below are some links and also the Pro One press release. A brief about GTCR making a security buy last year Story about Covert buying HSM from Honeywell. Story about HSM sells to Stanley Here's the Pro One press release, I've got calls out, and will have more later Protection One to be Acquired by GTCR LAWRENCE, Kan. and CHICAGO, April 26, 2010 (GLOBE NEWSWIRE) -- Protection One, Inc. (Nasdaq:PONE), a leading national provider of electronic security services to the residential, commercial and wholesale markets, today announced that it has entered into a definitive agreement to be acquired by affiliates of GTCR, a leading private equity firm that manages more than $8 billion in equity capital. Under the terms of the agreement, an affiliate of GTCR will commence on or about May 3, 2010 a tender offer to acquire all of the outstanding common stock of Protection One for $15.50 per share in cash, followed by a merger to acquire all remaining outstanding Protection One shares at that same price. The offer price represents a premium of 13% over the April 23, 2010 closing stock price of $13.76, and a premium of 118% over the $7.10 closing stock price on January 19, 2010, which was the last business day prior to Protection One's public announcement that it was considering a possible sale of the company. The total purchase price, including the refinancing of Protection One's debt, will be approximately $828 million. JP Morgan Chase Bank, N.A., Barclays Capital and TCW/Crescent Mezzanine have committed to providing the debt financing in support of the transaction. Protection One's board of directors unanimously approved the transaction, which is subject to customary closing conditions, including minimum levels of participation in the tender offer and regulatory approvals. The transaction is expected to be completed in the second quarter of 2010. Upon completion of the merger, Protection One will become a private company, wholly owned by an affiliate of GTCR. "Our board of directors has determined that the proposed price for the transaction is fair to Protection One's stockholders. We also expect that the tender offer will deliver value to Protection One's stockholders in a more efficient and more immediate fashion than under a traditional merger process," said Richard Ginsburg, Chief Executive Officer of Protection One. "This acquisition is an exciting opportunity for GTCR and all of Protection One's stakeholders. We are thrilled to be involved in the security alarm monitoring industry for a third time in the past ten years. We look forward to building on the strong base of business established by Protection One's top-quality team of employees, while continuing to provide great service to Protection One's customers," added David A. Donnini, Principal of GTCR. Affiliates of Quadrangle Group LLC and Monarch Capital Partners, which together own over 60% of the fully diluted shares (and approximately 70% of the currently outstanding shares) of Protection One, have each executed a tender and support agreement pursuant to which they have agreed to validly tender (and not withdraw) their shares in the tender offer. Protection One's financial advisor in the transaction is J.P. Morgan Securities Inc. and its legal advisor is Kirkland & Ellis LLP. Lazard Freres & Co. LLC advised Protection One's board of directors and its independent transactions committee with respect to the fairness of the offer price to be paid in the transaction. Morgan Keegan & Company, Inc. and Barclays Capital served as M&A advisors and Barnes Associates served as an industry advisor to GTCR. Latham & Watkins LLP and Skadden, Arps, Slate, Meagher & Flom LLP provided GTCR legal counsel. About Protection One, Inc. Protection One is one of the largest vertically integrated national providers of sales, installation, monitoring, and maintenance of electronic security systems to homes and businesses and has been recognized as one of "America's Most Trustworthy Companies" by Forbes.com. Network Multifamily, Protection One's wholly owned subsidiary, is the largest security provider to the multifamily housing market. Protection One also owns the nation's largest provider of wholesale monitoring services, the combined operations of CMS and Criticom International. For more information about Protection One, visit www.ProtectionOne.com.