Citizens Bank Leads Six-Bank Syndicate to Provide New Senior Secured Credit Facility to SAFE Security
Paul Sargenti, president and CEO of SAFE Security, ranked #21 on the SDM 100 list, San Ramon, Calif., announced that Citizens Bank, N.A. (“Citizens Bank”) led a six-bank syndicate that has refinanced SAFE Security’s senior secured credit facility. The new $150 million senior facility is co-led by Citizens Bank, as lead left arranger and administrative agent and U.S. Bank as co-lead arranger and syndication agent.
Sargenti, who founded the company in 1988, explained to SDM that the deal came together very efficiently with Citizens Bank managing the lender syndication process. “This syndication includes U.S. Bank as a co-lead with Citizens Bank, BMO Harris Bank, Capital One, One West Bank, and the Bank of Oklahoma. The total senior secured credit facility is currently at $150 million with a sub-debt tier of $25 million [of unsecured subordinated debt financing to complement the senior credit facility] provided by Prospect Capital,” he said.
Investment banking services for the syndication were provided by SPP Advisors.
“In concert with our equity partners at ICV, this expansion of our senior credit facility will provide the capital that SAFE needs to execute its long-term growth strategy and stay on track with strategic acquisitions and geographic expansion,” said Sargenti. “It also gives us financial flexibility to provide the finest security services and monitoring to our customers nationwide.”
Greg Buscone, senior vice president and market manager of specialized banking at Citizens Commercial Banking, the commercial banking division of Citizens Financial Group, added, “SAFE Security has a great business and we’re excited to be able to offer our expertise in security alarm industry financing along with our capital markets capabilities to help them achieve their financial goals. “SPP Advisors was retained by SAFE Security to provide investment banking and advisory services.”
Sargenti said working with Citizens Bank and others on the deal was a positive experience. “Their deal team worked tirelessly and was very helpful at every step in the process. The syndicate participants include four of the six banks that were in our last senior debt credit facility and two new banks that we were delighted to welcome,” he said.
Sargenti shared SAFE’s plans to use the new, expanded credit facility to continue its top line growth. “Funds will be allocated to each of our revenue channels; namely, bulk and dealer program acquisitions, internal organic sales, and our DIY program.” According to Sargenti, SAFE plans to grow revenues in 2015 by another $1-1.5 million. The access to funds provided by its lender group and equity will be critical to meeting those growth targets, he said.
“Look for very innovative customer enhancements in the new year,” said Sargenti. “An expanded DIY program may reach some renters in the marketplace, which were traditionally excluded due to the transient nature of renters. Our do-it-yourself product is IP-based and uses any Internet connection, so renters can take the product with them wherever they go. The DIY product for renters will allow them to use it and then move it to any other new location with Internet access.”
SAFE also plans to continue a company focus on upgrades. “Our long term strategic goals have been constant and we are well on our way to achieving them. Three years ago we set out to grow RMR to $10 million by the end of 2016 and we will be 75 percent there by the end of this year. Securing our senior and sub-debt credit facilities will be one of the most important components of fulfilling our long-term strategy,” added Sargenti.
“Our goals for 2015 are to continue to upgrade our dealer services portal, customer access, sales and service processes, marketing, and performance analytics all as part of our continuing investment in people and digital services,” he said.
Looking ahead, Sargenti told SDM about two new products coming up for its customers. “One of them is our SAFE ID, and we have just launched our SAFE loyalty program. This will allow customers to receive points for products and services, similar to programs used by airlines and hotels,” he said.
Sargenti reported that both items are in beta, but should be fully rolled out by the end of the first quarter. Watch for more information at www.SDMmag.com .