Security 101 partners with major investment group to accelerate growth

WEST PALM BEACH, Fla.—Security 101, a national commercial electronic security integration company, announced it has partnered with the investment team at Gemspring Capital for the purposes of accelerated growth in the security industry.

Security 101 is a leading provider of commercial security system solutions and differentiates itself from its competitors through an industry-first franchising business model. The company has more than 50 locations in the continental U.S. and is now poised to develop a local presence within markets where growth potential exists. Security 101 is well-known for its people and culture and will focus on expansion through franchising, acquisitions, and organic growth.

Security 101’s management team, led by Founder and CEO Steve Crespo, will continue to lead the business and be significant shareholders in the Company.

“We are excited to partner with Gemspring during this next phase of growth and look forward to collaboratively pursuing the tremendous market opportunity ahead of us,” Crespo said. “This partnership puts Security 101 in a position to rapidly expand our footprint while continuing to provide national and local customers the security industry’s finest customer service through our proven approach.”

Crespo told Security Systems News exclusively how the investment partnership with Gemspring came to fruition.

“For us, like every reasonably intelligent group of people in business, you always look at what you’re doing right and what you’re doing wrong and always looking at different ways to expand and grow the business,” he explained. “We’re a franchise model, and that franchise model has honestly been tremendous. It’s brought lots of good growth, it’s brought a lot of positive energy and culture - everything about our organization we couldn’t be prouder of.

“But we’re also looking at the industry and asking ourselves the question, seeing all of these big guys buying the other big guys and consolidating, our view in the industry is that a lot of the end users aren’t really attracted to necessarily doing business with some of these big guys - this is our view from what we learn from our clients. We asked ourselves, ‘Who’s going to be that next company that REALLY accelerates?’ We believe that company is us.”

Investment Opportunity

Crespo described Security 101 as “that relatively quiet company that is constantly growing, but not necessarily banging on our chests.”

“When I look at the industry, I say there’s a tremendous opportunity to get much more involved with national and global clients, but there’s also an opportunity to really expand our overall footprint, not necessarily in the U.S. but beyond, maybe start with North America and from there we can go into other places.

“When we look at that as a company, my business partner [co-founder] Jim Pasquarello and I, we look at the business and we say, ‘Well, to this point we’ve built this company on our own back. We’ve never taken out any kind of business loan, we’ve never leveraged anybody else’s money but our own, and we’ve constantly reinvested into the business. That’s been our model from day one - we’ve always been a debt-free company. We really felt it was time to bring in significant investment money to really add the fuel the company needed for truly accelerated growth.”  

Crespo noted that once the decision was made to seek an investment partner, it was time to “figure out when and how.”

“All roads continued to lead us down the private equity world,” he said. “Ultimately, what we wanted to do was find an investment partner that would have a similar philosophy to us. We wanted a firm that was truly an investment group and not the kind of group that wants to invest and then try to manage.

“We started looking at different companies, and when we linked up with Gemspring, it was quickly understood that they seek to invest in businesses that are strong, stable companies, with a good management team and with huge upside potential for growth. They really like the security space, they like service-oriented businesses and they like anything that is on the technology/software side. We kind of fit every bucket that they looked for.”

Crespo continued. “From there, we started back in the early summer working through the process with them and getting to know each other really well and understanding it was a good fit. That’s when we put this deal together with them, and we’re pretty darn pumped about it.”

Looking Ahead

With the investment deal in place, Crespo outlined what’s next for Security 101.

“Where we go from here is interesting,” he noted. “Naturally, our franchise model has been really, without any question, the staple of who we are – that’s our identity. That obviously will continue to be a major strategic component of what we’re building out.

“But what we will also do, in conjunction with that, is we will start to do company-owned locations that will be done either organically or through acquisition by seeking out quality integrators that are a good fit culturally and philosophically to our company and do that as add-ons to grow our business.”

Crespo noted that the company-owned locations will be focused on the U.S. and the rest of North America, “but with the opportunity in the future of going beyond. Anything that we do beyond the United States will be timed and very strategic.”

In addition, Security 101 has plans to add different levels of support and services for its franchises and clients in order to be able to bring more professional services.

“This is a big component of what we’ve been working on the last few years, and that’s been a tremendous differentiator for us,” said Crespo on providing professional services. “We’re not just a company that comes out and installs and does services, but actually brings professional services to a level where we’re working with IT departments and physical security departments and really honing on doing a true integration, not just plug and play.”

“We see this as a big opportunity in the space, and so we’re going to put a lot more energy into being able to go out there and provide the right level of service that national and global customers are looking for.”

While not offering specifics, Crespo noted that Gemspring has made a “very large investment” in Security 101 for the foreseeable future, joking that the “gas going into the rocket ship will be plentiful. That being said, it’s also going to be done very strategic in a very smart manner.”

Michael Walton, President at Security 101, added, “Today’s client demands an attention to detail that includes an extensive knowledge of the product and a personalized approach to sales and service — each of which Security 101 has developed a positive reputation for providing on a consistent basis. You can only achieve this with the highest-quality teams, and our success has always been directly connected to our company culture and the people who have created it.”

"Steve and his team have built a high-quality organization, evidenced by its reputation in the market for providing stellar service to its customers,” noted Alex Shakibnia, Managing Director at Gemspring. "We believe the commercial security integration market is poised for significant growth as customers increasingly look to strategic thought partners like Security 101 to manage the evolving security challenges and the convergence of physical and cybersecurity. We look forward to working with Steve and the entire Security 101 team to expand Security 101's client base, service and technology offerings, and geographic footprint."