Audax Group, a private equity firm based here with investments in middle market companies, announced Wednesday it completed a deal to acquire Tri-Ed/Northern Video Distribution.
Audax manages more than $5 billion of capital through private equity, mezzanine debt and senior secured debt funds. While the company holds investments across a range of industries, the Tri-Ed/Northern Video acquisition marks its first foray into the security industry, Audax Group Managing Director Jay Mitchell tells SSI.
“We have a number of investments in value-added distribution businesses, none that are in the electronic security product space, but a number of which have common traits such as good organic market growth in fragmented industries,” he says. “We looked at the security product space where Tri-Northern is the No. 1 independent distributor and we really like the opportunity to continue to build the footprint, both in the U.S. and Canada.”
The full Tri-Ed Northern Video executive team will remain intact, Mitchell says. Tri-Ed and Northern Video merged in 2010 after both distributors were acquired by Dallas-based Brazos Private Equity Partners. Senior management at both firms took on new roles in the combined company. Among them are Brian James, Steve Roth, James Rothstein and Pat Comunale, who will serve as president and CEO of Tri-Ed/Northern Video following Audax’s acquisition. Roth, formerly CEO, will now serve as chairman.
Mitchell declined to provide any details of the transaction, but says Audax was introduced to Tri-Ed/Northern Video “in the December frame.”
Based in Woodbury, N.Y., Tri-Ed/Northern Video operates 47 branch locations across North America, providing video surveillance, intrusion, access control, fire/life-safety and other ancillary low-voltage products to the commercial and residential markets.
Mitchell says Audax’s expertise in executing “buy and build” growth strategies centers on buying into a leading player with a strong market position and then helping the business acquire competitors.
“The [Tri-Ed/Northern Video] team has demonstrated a track record of doing that already, and we think that through our sourcing networks as well as our additional access to capital, we can accelerate that growth through acquisition,” he says.
Although he would not elaborate, Mitchell says the company is “currently engaged in a number of active discussions with potential acquisition candidates.”
Harris Williams & Co. advised Tri-Northern Holdings Inc., the holding company for Tri-Ed/Northern Video, in the deal. Kirkland & Ellis served as counsel to Audax Group. Bank of America provided senior debt financing and funds managed by Oaktree Capital Management provided junior debt financing to support the transaction.
Rodney Bosch is Managing Editor of SECURITY SALES & INTEGRATION. He can be reached at (310) 533-2426.