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Winnipeg Free Press - PRINT EDITION

Private firm to take over Garda World Security

By: Ross Marowits

Posted: 09/8/2012 1:00 AM | Comments: 0

MONTREAL -- Garda World Security Corp. plans to take a break from its 14-year run as a public company after agreeing to be taken over by a British private equity firm that would allow the cash logistics and security business to prowl for new acquisitions.

The Montreal-based company said a consortium formed by founder, chairman and CEO Stephan Cretier and a subsidiary of funds advised by global private equity firm Apax Partners is offering $12 per share in cash.

The deal is worth $1.1 billion, including the assumption of $625 million of net debt. About $300 million will be spent to buy out shareholders while the more than 25 per cent stake in the company owned by Cretier and senior management will be rolled over to the new entity.

"My objective as an entrepreneur is to build this business to one of the top three or four in the world, and we think that being private is probably the best thing that can happen to us today," he told a news conference Friday.

The security industry is consolidating and players have to either "look at the menu or you are the menu."

He said it's extremely difficult in today's markets for a small-cap company to grow while feeling the constant pressure from investors to deleverage.

Despite strengthened results, there are days when few company shares are traded and investors aren't even willing to meet, Cretier said, highlighting the challenges of raising capital to fund acquisitions.

The offer for Garda's 32 million shares represents a 30 per cent premium over the closing price of the company's Class A shares (TSX:GW) on Thursday and a 45 per cent premium to their 90-day weight average.

Cretier responded to an analyst's challenge on an earlier conference call about why the company is giving up the hope of returning its share price to the level of about $20 reached before the 2008 financial crisis.

Garda's debt surged several years ago to fuel its aggressive expansion plans, particularly with the 2007 acquisition of U.S. cash logistics business ATI for $395 million plus debt.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition September 8, 2012 B9

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