Stealth Founders Backed Entrepreneur Wants To Acquire A Security Business
An entrepreneur is looking to buy a security business, and he has the financial backing of a group of investors, including Stealth Monitor's co-founders, the remote monitoring company aiming for a billion dollars in annual revenue.
He contacted IPVM, asking about our interest in being acquired. While IPVM is not for sale, we were interested in learning more about his approach.
In this report, based on an interview with Resit Melik of Edessa Growth Partner, IPVM examines what the fund is looking for in the industry and how Melik plans to convince retiring owners to sell their businesses to him.
Contrast to another recent effort: Investor-Backed Search Fund Second Summit Wants To Acquire A Security Integrator.
Also, see Pavion Aims To Be Top 3 Largest Global Security Integrator (CEO Interview) and James Rothstein Speaks On Investing in Integrators.
Executive *******
****** **** ****** ****** *******'* **** partner,***** *****, *** *** ** *** **** Columbia *** * ********** **********, ************ that ** **** *** ***** ** can *** *** ******* ****** **** the *******/******* ** *** ********* ****** company *** **** ** ****** ** financing *** ********* ** *** *****, and ** * "********* ******," ** "would ***** **** ** *** *** or **** *** ****** ****** ** my *******." ** **** ***** **** he ***** ********** ****** "** ***** 7-10 ***** *** ******** *******" ** the ******* ** **** **** ** the **** *.* *****.
****** ** ******* **********'* ******** *******, Edessa ** ******* ** *** **—** EBITDA *** ********* **** ********* ******* and ****** $* *******—$** ******* ** annual ******* ****** ******** ********. ***** this ******** ** ** *** ****** of *** ****, ***** ** ****** a ******* ***** ** *********** ***, in *****'* *****, *** "**** *******" who *** ******* *****.
***** **** **** *** ******** **** for *** ******** ******* ** ** "make ** * ****** *******." ********* need * ******* ***** ** ** public, *** ***** ************ **** ** his "********," ***** ** ****** *** definitively *** ** **** ** ** aiming **.
***** **** ** ******* ******** ******** because ***** *** ******** ********** ****** and ** ***** ** *** *****, which ** **** ** **** **** his *********' ********. ***** ******* ******* the **** **** **** ***********/*******/******** ********* in *** ***** **** ********* ******* and/or ****-**** *********, *** **** *** seeking ** ******.
Stealth ********** ******* *********
******'* ********* ******* ******* **********'* ********,*** *************** ******. ****** *** ********* *** ***** a ********** ********** ******** ** *** physical ******** ***** ******** ******'* ***** in **** ********** ****** *** ***** confidence ** ********* ******* ** *** investor ****'* ****** *********. ************ *** *********** *** *******:
***** ********** **** *** ****** *******'* investment *** **** * ***** **** of *** ******* **** *******.
Physical ********: ****** *****/*** ****
*********** ** *** *** *** ****** targets *** ******** ******** ******, ***** referenced "****** ******" ** *** ***** and *** **** ***** ***** *****, which *** **** ********* ** *********:
*** ****** ** [******** ********'*] ******* and *** ****** ** *** ******** is **** ** **** **** ****** fund *********.
**** *** **** ** ***** ****** fund ***********, ***** *** **** [**** operate] ***** *********, ******* ******** *********, and ****** ******* *********. *** ** want ** **** ** *** ********* and ********** **** **** **** **** before.It ** ******* ******. [Emphasis added]
**** ********, ********** ******** ****** *** ideal *** ****** **** *********** ***** they ***** ***** ***** **** ******** and *** *** ***** *** ******* equities ** *****, ***** *****:
***** *** * *** ** ********* who **** ** ****** ** *** middle *** ***-****** *************. ******* ******** do *** ***** ** **** ***** because ** ** *** ***** *** them.
***** **** ***** **** ***** **** "boomers" *** **** *** ***** ********* for *** **** **** ** **** decades *** *** ******** *** **** succession *****, ** ******* ***** ************* for ****** ***** **** ******.*** *.*. ****** ************* *** **** ****** ********** ** people **** ******* **** *** ****, which ***** **** *** *** ** - ** ***** ***.
***** **** ******* *** *** ******** security *** ****** **** * ***** "in ***** ** ***" ** *********** "one ** *** **** ********** ******* equity *****" ** *** ***** ***** in ******, ***** ** **** ****. In ****,******, ** ***** ****** ********, *** sold ** * ******* ***************** ******** ************* ************, **************** ******* ****** **** * *.*.
"A *** ** **** **** ** **** *******"
*** *********** ******** ********* ** *** physical ******** ********** ** ******* "***-****" element **** ******** ****** ** *** space, ***** ****, *********** **** ** is ********** ** ********* **** ******* have ** ******** ******* **** *** him ** ******* **** *** **** him *** **** ** ***** **** scratch:
* *** ** *********** *** *********, etc.'s ********, *** **** ***** ***** software ** *** *********** ****. ***** are ******* ********** ******* ***** *** it ** ********* ** ***** ****** share, [***] ***** **** ******* ***** their ********* ** *********. **** ******* have ********* [*** *********].
*******, * *** ** **** **** is **** *******, *** [**** * come **], * **** **** * lot ** *** ************, *** *** people, *** *** **********. **** ** why * ** *** ******** * new ******* ** ***** *** **** myself ******* * **** ** ** not ****.
********* ********** **********, ******, **** ********* will ****** **** *** ****** / incumbent **********, *** ***** *********** ** tend ** **** **** *****, ******** accounts **** *** **********.
Prefers *********** ********* *******
********* * ****** ********** *** ********* revenue *** *** ******** ******** ***********/******* providers *** ********** ******** **** **** quality, ***** ******** ** ** *** his *********' ********* *** *** **** model ***** **** *** "*****-**** ***" like ***:
** *** *** * ******** *******, every ****, **** ***** ***** **** zero. *** ** *** *** [* subscription-based ********], *** **** ** **** of *** **** ****** **** ****** and *** **** **** ****** *** will ***. **** ** ****,you **** * **** **** ** **** **** **** **** **** ****. [Emphasis added]
************* ********* ******* ** *** ******** best.As * *** ***, *** ** *** **** ** ***** ******* **** *******. [Emphasis added]
********* ******* *** ****** ****** * trend ** ******** ******** ********** ** manufacturers ** ***********. **** **** **** one **** ******* ** ******** "******* ** * *******" ******, ***** ***** ***** *** ** their ******** ** **** ** *** pay *** ************ ****.
High ********* ****
**** ********* ***** ** ******** ******** providers *** ******* ******* **** ***** Edessa ****** ******** ********. ***** ****:
** ** *******-********. *** ********* **** is ****. *** ** *** **** to ****** **** ******** ******** ******* unless ********* ** ***** *****.
Not ********** ** ******** *****
************ ***-**-**-*****-********-**-**** *****, ***** **** ** ** *** interested ** ******** *********:
* **** ** ******** ** ******** hardware. **** *** ******* *************. * would ****** *** ***** ******* **** just ******** *** *****.
Not ******* ** **** ******** ********* ** **** *** ********* ** **
***** ** *** ******* ** ******** manufacturers ******, ** ** **** **** many *** "*********" ** **:
* ** ****** ** **** **** from ****-**** ****** **** ** **** high ***********. * ***** **** ** use ****, *** *******, * ***** not ***** ***. * ** ****** not ******* ** [***] ********* [****] just ******** ******* * *** ** them *** ********* [** **].
Interested ** "***** ***** *****" ** ******** ********
*****'* ***** ** ******** ** "******** security" ** *****, ********* ***** ******** integrators, ****** ******* ***********, *** ***** patrol *********:
**** * **** [*****] ******** ********, I ** *** **** ******* ***** video ************, *** * ** ******* about *** ***** ***** *****, ********* armed ****** [***] ******* ******** [*********].
***** ******* ********* **** ** ** more ********** ** *** **********:
[***** ***** ****** *********] ******* [*** armed ********] ******* ** **********, **************, government ********, ** ************. **** * like ***** ** ** **** ** is *********** *** ** ** ******** to ********; * **** *** **** than ***. * *** ** *********** do ***, ***** ** ****, *** if * *** [******], * ***** rather **** **** ********** ****** **** end *********.
"It ** ******* *** ***** **** *** **** ***, *** **** *** *** ***"
****** *** ******** ******** *****, ***** said **** ** ***** ** ***** to ******* *** ******* * ***** company, **** ** ****, *** ****** are ******* *** **** ****, *** he ***** ** ***** ** ** landed ** ***** ****** ******** ******** within *** **** *.* *****, *** period ** ***** ** **** **** his ******:
** * *** **** * ***** serverless ******* [*****] ********** ** ***** [that **] ******* [** ** ********** price], **** ****, *** ** ** usually *** **** ****.
**** ** * ***** *******, *** it ** *** ** *** ***** companies * ******** ****** ** **** I ***** **** **** ** ********* that *** ******** ** ****** **** investors. * **** ** ****** **** you: ** **** * - *.* years **** ** **** *** *******.It ** ******** ******* *** ***** **** *** **** ***, *** **** **** *** *** ***. If I can find a company like EyeQ, that would be amazing. But if I end up just finding a company that provides municipalities on demand, I am completely okay with that, too. [Emphasis added]
Interests ** ***** ******** *********
***** ******* ******** *** ******** ** working **** ***** ****** *********, ****** that ** ***** ** **** **** people *** ***** ** "**** **** things ***** ****** ** *** **** to **** ****":
*** **** ** **** **** ****** that ***** ****** ** *** **** to **** ****, *** ****** ***** to **** **** ******. * ***** be **** ** ******, *******, ***** companies **** **** ** ***** ** history, [***] ********* **** * **** time *** [****] ******** *********.
******* *** ********* ******* ** "******* with ******" **** * *******'* "**** qualities" ** ********* ***** ********* ******* good **. ** *****:
******** ****** ** *** ****. ***** difficulties ***** **** **** ** ***********. I **** ******* **** ******. * love ******* **** ******. **, ** the ******** **** ** *** ******** is *** ** **** **** *********, I ***** ** ** * **** match.
***** **** **** **** ****** ******** security, ***** *****-********* ******** **** ***** guarding *** **** ******** **** ****** control ** ***** *********, ********* *** less ****** ** ****** **** *** to *** ******-**** *********:
****** ******* ** **** ********, *** it ** **** ********** ****** ** switch. * **** **** * ******** like [***** ****** *********]. * **** it ** * *** ** ****, and ** ** *** ** ********.
******** ** **** ***** *** ****, IPVM **** **** ****** ******* ******* are, ** ****, **** ********* ** switch.
Bringing ********* & ******** *********
** ******** ******** ****** ** ******** security ** **** ** ******, ***** pointed *** **** ** **** *** think ** *** *** *** ******** better **** *** ********/******* ******, *** he ****** ******* ********* *** ******** resources ** *** *****:
[**** ****** **** *********] **** ** opinion **** **** *** *** ***** companies ****** **** ******. * ***** that ** [********]. ***** ** ***, I ***** *********.
* *** ** ***** ****** **** amazing *****. **** **** *** ******** a *** ****, *** **** ****** [execute ***** *****] ******* **** ** not **** *********. * ** *** only ******** ***** *** **** ******** [in] ***** *********, **** **** ******** of ***********. **** **** *********. **** know ******, *** **** *** ***** you *********. **** *** **** *** up **** *** ****. **** *** potentially ** **** *********.
"Keep *** ******"
******* ********* *** *********, ****** **** promises ** ******** ******** ******* ********** and **** ** "***** ***** **** to *** *** ** **** *** single ****** ** ** *******." ** emphasized *** *** ********** **** *** understand **** ********/******' ******** *** *** he **** *** ****** ** ***** restructure *** ********:
* ** * ****** ******. ** is **** **** ***** * ***. I ** **** ******, **** *** southeast **** ** ******. * ** Kurdish ********, ****** **** * **** family.
* *** ** ***** ******** ****** really **** ***** ***** ******. **** I *** ***** **** ****** ****** bring **, "***, * **** ** come ** *** *** *** *******, but *** ** * *** **** changes ********."
Flexible ** ****** *********
***** ***** ** ****** ** **** in ** *** ** *** *******, he ** ******** ** ********/******* ******' preference ** ********* ****** ** *** company ** ***:
** **** **** ** **** **** some ****** *****, **** *** ** so. ** **** **** ** ***** exit, **** *** [***], ** * can ** ***** ********.
***** ********** **** ***** **** *********** is ******* **** ********* ** ******* equity *******.
"Young *** *********" & ******** ********** *********
** *** ** *** *** ***** reasons, ***** ********** ** *** ********** in "******* ***********" *** ****** ********** scalable:
* **** **** * ********** *** my ****. * *** ** ******** Consulting ****** ** ***. **** * got ** *** ** ********, *** then * ****** **** *** * half ***** ** ******** *** *******. What ** *** *****, **** * lot ** ******* *** ********* ** smaller ****, *** **** *** *********** and **** ********** ** ********* *** scalable ** ********.
***** **** ********** *** ** ** young *** ***** ** *****/**** *** company:
* ** ** ***** ***. * am ** ********* *** ** ****** as ******* *** **.
Paying ** ** ** ****** *** *** ****** ********
****** **** **** ** ** ******* to *** ** ** ** ** EBITDA ******** *** *** ******** *** a ******* ****** $** ******* ** $40 ******* ** ****** *******, * range ****** *********** ****** **** ******* *** ******* within ******** ********, ****** ****** ********. ***** ******* ********** ** *** ideal ****** *******'* ********* *******:
* ***** *** **** ** ** a **** ******* **** $** - $15 ******* ******* ** **** ** too *****.
[** ****** ********,] * ** *** think [** ***** **] **** **** 5X. ***'* *** * **** * company [****] ***** $* ******* ** EBITDA, *** ***** ******* ** ***** recurring **** ** ******** *************. ******** is ******* **%, **% **** **** year. **** * ***** *** ** - **.
****** ******** ************* ***** **** *** company *** * *********** ******** **** instead ** ******* ** * ***** number ** ********* *** ** ******* to ******* ******* *********** ***** ** customers ****** ****.
"I **** **** ** * ****** *******"
***** **** **** *** ******** **** for *** ******* ** ** **** it ******. ** **** ******** ** how *** ********* *** **** ****** in ******* ******** ******** ** ******* equities, ***** ******** ******* **** ********* in ** **********:
*** **** ***** ***** ****** **** investors ** **** **** *** *******. My ********* ** *** **** ** exit. **** ** ***** *** *****. They ** *** **** ******* ******** with **** **** **** ** ****.
Possibilities ** ******* ** * "**** ********" ******* ******
***** ****** ** *** ** *** barriers, ********** *** ** *********** **** as*******-***** ***, ***** ************ **** **** ** his "********," ***** ** *** *** definitively ***** ******. ***** **** **** there *** ************* ** ******* ******* PEs, *** ** ** "* *** scared" ** ** **** **** ***** since ** ***** ** ** "*****" in ************ * ******** *** **** he ***** ** ** *** ************** to "**** **** ** *** ******":
***** [****] * **** ******** **, because ***** ****** **** ** **** people. *** **** **** ** ****. You *** **** ** ***** **** to ****. **** *** [******* *** company], *** **** * ******* **** you **** **** **** ** *** people *** ****** **** ***** ****, whoever *** *** ***** **.
Commit ** **** *** ** ***** *-** *****
********** ** **** ** *** ******* for "** ***** ***** ** *** years," ***** **** *** *** **** and *** ** **** *** **** this **** ** ****** * *********** but *** **** ** *** **** decade:
* **** ** *********, ***, **** if * **** *** ******* * run [* **** **** ** ******] because * ** *** ****** **** only ** * ***********.
* **** **** [**] ******** ** is. * **** **** **** ** fiance. * ** *** **** ** change ** **** ***** **** ** six *****. *******, ** * **** the *******, * ***** [...] **** it *******. **** ** ***** ** exit, ** ***** *** ********* *** want ** *****, * *** *** [the *******] *** ** ***** ** new *********. *** **, * ***** say [* ***** ****] ** ***** seven ** ** *****, *** ******** forever.
***** ********* **** **** *** *** selling *** ******** ***** ** *-** EBITDA
*** ** ***** **
** *******, ** *** **** ** - *** ******, *** ** ******?
*** ******, *** *******, *** ****** EBITDA ********* ******* ****** ****** *****, e.g., ** **** *** * ****** traditional ********** ******* *% ** **%, that ***** ** ********* **** **** rapidly ******* ****** ***** *********.
** *** *** ****, * ***** with *** **** **** ** * broadly ******* *********** ** *** ******. On *** ***** ****, ** ***** to ** ********* ***** *** ********* costs *** ** **** **** *** are ***** **** *********.... (******* *** ***** ** *****).
***, **** ** *** ******** ***** to **, *** ***** ******* ** understand *** ***** ******* ****:
*** ***** *** **** ************ **** the ******* *** ** ******* ** I ******* **** ** ***** ****** funds ** ** ***** *** ******** hundreds ** *********, ** ****.