GardaWorld | Private investment as a valorization tool

Every time I hear from Stéphan Crétier, the founder and CEO of GardaWorld, it is to learn that the entrepreneur has just refinanced his company, increased his stake in its capital while increasing the valuation of the group which continues to grow and today has 132,000 security professionals in more than 80 countries.

The last week of October was no exception. In a fourth transaction in 12 years, which valued GardaWorld at 13.5 billion, Stéphan Crétier and certain members of the company’s senior management increased their stake in its capital to 70%.

They did this in partnership with the private investment firm HPS Investment Partners, which bought the stake held by the Rhône Group firm in GardaWorld since 2019.

It is necessary to provide a brief historical reminder here to fully understand how GardaWorld has succeeded over the last 12 years in generating growth while producing valuation in a rather exceptional manner outside the stock markets.

In 2012, Mr. Crétier decided to privatize GardaWorld, which had been listed on the Stock Exchange since 1998. The value of the shares was stagnating while financial analysts only criticized the company for having too much debt.

By joining forces with the private investment fund Apax Partners, Stéphan Crétier launched a public purchase offer for all the shares of GardaWorld which valued the company at 1.1 billion, which represented a premium of 45% over the average stock price of the previous three months.

In 2012, the founder retained a 25% stake in his company, senior management, 5%, while Apax Partners acquired 70% of the shares. The group had revenues of 1.2 billion and had 45,000 employees worldwide.

Five years later, in 2017, Apax sold 45% of its shares to investment firm Rhône Group in a transaction that valued GardaWorld at 2.97 billion. The group recorded revenues of 3 billion and employed 62,000 people after making a breakthrough in the transport of valuables.

In 2019, the private investment firm BC Partners bought the shares of Rhône Group in a transaction valued at 5.2 billion, while the participation of Stéphan Crétier and senior management increased from 30 to 49%. The group had 92,000 employees and had revenues of 4 billion.

The latest transaction revealed on Monday therefore values ​​the GardaWorld group at 13.5 billion, while Stéphan Crétier now controls 58% of the shares, and members of senior management, 12%.

Last year, the company generated $6 billion in revenue and had 132,000 employees worldwide.

Four pillars of growth

Stéphan Crétier said he was particularly excited about the latest transaction he has just concluded, which confirms, according to him, the accuracy of the strategy adopted by GardaWorld 12 years ago now.

“This is one of the five largest private equity transactions in the world this year and the largest private company buyout in Canadian history. We partner with investors who believe in us and our entrepreneurial model and who benefit from it. »

“We have produced an internal rate of return of 30% per year over the last 10 years. They make money and we take a little from each transaction, but we prefer to stay in the capital and increase the valuation of the company,” the entrepreneur told me from his Dubai office where he supervises the international development of the group.

It is still surprising that with each new financing, the group of shareholders linked to the company does not become diluted, but on the contrary expands its footprint.

Five years ago, GardaWorld had net profits of 500 million; last year, the group generated $1.2 billion in profits and the company relies on four pillars to ensure its future growth.

“We are still developing our security services around the world, we have a crisis response and security consulting platform, we do virtual surveillance, a sector that we have just strengthened with a 500 million acquisition that we have just completed this week and, finally, we are placing a lot of emphasis on our cash management systems for businesses,” says Stéphan Crétier.

GardaWorld has developed the Sesami system which allows retail businesses, restaurants and even banks to manage their cash flow on a daily basis.

“It’s like mini ATMs that manage cash. We have more than 390,000 installed in all Starbucks, Couche-Tard, Circle-K, 7-Eleven, Walmart… This division generated more than 2 billion in revenue last year,” explains Mr. Crétier. .

Five years ago, GardaWorld failed in its attempt to acquire the British company G4S, the largest security group in the world with more than 500,000 employees, but Stéphan Crétier is not unhappy with this failure.

“We have the capacity to be resilient. We wanted to do this transaction, we lost it, but we got back up and now we aspire to be a niche firm in our field, the world reference rather than the biggest. The entire management of GardaWorld has this entrepreneurial fiber, it is part of our DNA,” believes the founder of the group.