Vol. 10, No. 2, February 2012

FOCUS CLOSES TWO DEALS

FOCUS Represents SecurAmerica in Acquisition of Aeropoint Security Enterprises

Based in Atlanta, Georgia, SecurAmerica LLC is a privately-held company dedicated to providing premium contract security, shuttle bus, guest relations, and concierge services. The Company has experienced rapid growth since its inception in 2005.

This acquisition will add nearly 350 employees to SecurAmerica’s staff while strengthening its Class A High Rise, corporate campus, manufacturing, and residential complex presence in the Northeast.

According to John Adams, President and COO of SecurAmerica, “This acquisition will help achieve SecurAmerica’s growth goals in 2012 and position the company to have a more significant presence in the Northeast.   It also strengthens our management team by adding very talented security professionals to our organization.

In Boston alone, SecurAmerica has grown from the Top 12 to the Top three largest ranked security firm based on size. More importantly, SecurAmerica now has the resources and talent to better serve the entire Northeast marketplace. We feel strongly that both our customers and employees will experience significant benefits from this transaction.”

Aeropoint Security Enterprises provides professional security guards, concierge, and mobile services to a wide variety of properties in Massachusetts and the surrounding states, and was an attractive acquisition for SecurAmerica given their Boston location.

SecurAmerica can now further expand its services in the New York, New Jersey, Pennsylvania, and Massachusetts markets. Additionally, Aeropoint Security’s client base matches that of SecurAmerica, both providing high quality contract security services to high rise buildings, hospitals, and residential communities.

According to Jonathan Wilfong, FOCUS Regional Managing Partner, “This transaction broadens the client base and coverage of SecurAmerica in the Northeast and creates great benefits of scale for SecurAmerica. The acquisition was a natural fit.”

FOCUS Represents SBC Systems in Acquisition by Morneau Shepell

SBC is a leader in employee benefits administration systems

SBC Systems Company, Inc., headquartered in Atlanta, Georgia, and its affiliate in the UK, is a leading provider of employee benefits administration systems, serving clients in the U.S. and the United Kingdom in a wide variety of industries. SBC’s platform manages benefits plans both onsite and through a SaaS model. It provides self-service functionality, management reporting, workflow, and integrates with vendors and internal departments, making it easier to manage benefits.

The platform can handle multiple business units or country operations in a single installation. SBC’s software manages the complexities of employee benefits administration by leveraging leading-edge technology to deliver world-class, flexible employee benefits administration solutions. 

Morneau Shepell Ltd. (“Morneau Shepell”) is the largest Canadian-based firm offering industry-leading benefits and pension consulting, outsourcing, as well as health and productivity solutions. The company works with clients to develop end-to-end insights and solutions that integrate with their business strategies to achieve results.

Through benefits and health solutions consulting, pension consulting, health management, administration solutions, and an employee assistance program, Morneau Shepell helps clients reduce costs, increase employee productivity, and improve their competitive positions by supporting their employees’ financial security, health, and well-being.

According to Peggy Horn, president of SBC, “The SBC management team sees significant opportunity in joining a large and innovative player in administration solutions like Morneau Shepell. With the backing of Morneau Shepell, we are very excited about the road ahead, both for our business and our existing clients.”

Jonathan Wilfong, FOCUS Regional Managing Partner, added, “This transaction allows Morneau Shepell to expand its U.S. presence and further build its administration platform while offering new services to SBC’s existing client base.”

Active FOCUS Deals

Operating nationally and internationally, FOCUS currently is working with buy- and sell-side corporate clients, private equity groups, holding companies, and late stage venture capital firms in 23 areas:

We have executed dozens of transactions in a range of market segments, but the same fundamentals apply across all of them. Our on-going transaction process provides us with up-to-the-minute market knowledge in these sectors that may be of corporate development interest to you.

New Hart-Scott-Rodino Thresholds for 2012

On January 24, 2012, the Federal Trade Commission (“FTC”) announced its approval of new upwardly adjusted filing threshold amounts for Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”) Premerger Notification filings. The newly adjusted threshold amounts were published in the Federal Register on Friday, January 27, 2012, and will become effective on Monday, February 27, 2012 (the “Effective Date”).

The HSR Act requires each of the parties to a proposed transaction involving a merger or an acquisition of voting securities or assets, which transaction exceeds certain monetary thresholds, to submit to both the FTC and the Antitrust Division of the Department of Justice (the “DOJ”) prior to the consummation of such transaction a filing called a Notification and Report Form for Certain Mergers and Acquisitions (“Notification and Report Form”).The Notification and Report Form provides the FTC and the DOJ with, among other things, detailed information about the parties’ respective business operations and the proposed transaction.

If a proposed transaction requires the filing of Notification and Report Forms (a “filing”), the parties must also comply with the applicable HSR Act waiting period before the transaction can be closed. Typically, the waiting period is thirty (30) days from the date a filing is delivered to both the FTC and the DOJ, unless Early Termination is sought and granted, fifteen (15) days from the date a filing is delivered to the FTC and DOJ for the acquiring person in the event of a cash tender offer, or fifteen (15) days from the date a filing is delivered to the FTC and DOJ for certain bankruptcy related asset transactions (e.g., 363(b) sales).

For a proposed transaction to be reportable and require a filing, three (3) tests must be satisfied: (1) the Commerce Test (one person must be engaged in commerce in the United States or activity affecting commerce in the United States), (2) the Size-of-Transaction Test, and (3) the Size-of-Person Test.  However, in circumstances where all three (3) tests are met, the applicability/availability of one or more exemptions provided for under the HSR Act and its rules may eliminate the need for a filing for what would otherwise constitute a reportable transaction.

The 2012 thresholds for the Size-of-Transaction Test and the Size-of-Person Test are as follows:

  • Size-of-Transaction Test—A filing is not required/reportable in 2012 for transactions closing after the Effective Date and valued at less than $68.2 million (the total value of assets and voting securities held as a result of the transaction).
     
  • Size-of-Person Test—Where a transaction closing after the Effective Date is valued at between $68.2 million and $272.8 million, at least one person must have total assets or annual net sales of at least $13.6 million and the other person must have total assets or annual net sales of at least $136.4 million for the transaction to be reportable/require a filing in 2012. However, unless an HSR exemption is applicable/available, transactions in excess of $272.8 million closing after the Effective Date are reportable and will require a filing in 2012 regardless of the Size-of-Person Test.

The HSR Act filing fees for 2012 will remain the same as the fees for 2011, but the applicable threshold amounts will be upwardly adjusted. For transactions valued in excess of $68.2 million but less than $136.4 million, the filing fee is $45,000; for transactions valued at $136.4 million or greater but less than $682.1 million, the filing fee is $125,000; and for transactions valued at $682.1 million or greater, the filing fee is $280,000.

The HSR Act is a very complicated regulatory schema, with significant nuance to its rules, regulations, and interpretations and contains many potential traps for the uninitiated. Because civil penalties imposed by the FTC for failure to comply with the HSR Act can be substantial (up to $16,000 per day), readers are advised to seek the assistance of experienced HSR counsel in determining the reportability of/need for a filing with respect to a proposed transaction. 

Should you have any questions about the information in this article or the potential reportability of/need for a filing with respect to a proposed transaction, please do not hesitate to contact the authors.

Thomas Woosley Joins FOCUS as a Senior Advisor

Woosley Brings 30 Years of Experience in the Intelligence Community/Defense Industry

Thomas Woosley has joined FOCUS as a Senior Advisor in its Washington, DC office. According to Doug Rodgers, FOCUS’ CEO, “Thom’s more than 30 years of experience in the intelligence community and defense industry will bring FOCUS clients unique access and perspective into the Intelligence and defense community at the highest levels.”

Mr. Woosley served 26 years as a career army intelligence officer, holding numerous command and staff positions including: chief of military intelligence for the U.S. Army Personnel Command; commander of a tactical military intelligence (SIGINT) battalion; commander of a strategic military intelligence brigade supporting the National Security Agency; chief of the Initiatives Group for the deputy chief of staff for intelligence (G2); and as chief of the Intelligence and Electronic Warfare Directorate/Force Development and Integration (DAMO-FDI) for the deputy chief of staff for operations and plans (G3). As the senior intelligence officer assigned to the G3, Woosley directed all planning, programming, and budgeting for tactical intelligence programs valued at over $5 billion.

Mr. Woosley started his career with the Battelle Memorial Institute and later spent ten years with Science Applications International Corporation (SAIC) as a senior vice president. He led the largest SAIC Operation in the Pacific, growing a contract base valued at over $500M and supporting Air Operations Center (AOC), intelligence, communications, and logistics activities at nine Air Force, Army, and Combatant Command locations around the Pacific Rim.   

COL (R) Woosley, a member of the Officer Candidate School Hall of Fame at Fort Benning, Georgia, is a recipient of the Military Intelligence Corps’s Knowlton Award. He is a graduate of the University of Texas at Austin, the Defense language Institute, the Army Command and General Staff College, the Armed Forces Staff College, and the U.S. Army War College.

FOCUS Industry Practice Groups

► Capital Financing -- www.focusbankers.com/capitalfinancing

► Education & Human Capital Development -- www.focusbankers.com/education

► Energy Production & Distribution-- www.focusbankers.com/energy

► General Middle Market Businesses

► Government, Aerospace & Defense -- www.focusbankers.com/gad

► Healthcare & Life Sciences -- www.focusbankers.com/health

► Information Technology -- www.focusbankers.com/technology

Telecom Technologies & Services -- www.focusbankers.com/telecom

About FOCUS, LLC

Founded in 1982 in Washington, D.C., FOCUS, LLC provides a range of investment bank services tailored to the needs of middle market businesses and their executives. Today, we are a national firm serving clients from offices in major cities across the United States. FOCUS specializes in serving business units with revenue or transaction sizes between $5 and $300 million, serving entrepreneurs, corporate owners and various types of investors. FOCUS clients include large corporations and private equity firms that engage the firm for middle market transactions.

FOCUS has achieved a very high close rate on accepted buy side, sell side and corporate finance mandates because of the unique resources, process and perspective that we bring to middle market investment banking. FOCUS has developed a systematic, research driven, open and proven transaction process. It is the driving force of our firm and distinguishes us from other investment banks serving the middle market.

With extensive investment banking transaction experiences and a group of seasoned operating and financial executives, our firm provides a unique value proposition. We bring a strong operating perspective, a wealth of practical experience and a unique research and transaction process to our middle market clients. Our knowledgeable resources include seasoned partners managing directors, principals, research staff, internal databases of national and international contacts and deal experience in a range of industry sectors.