SLP Capital Purchased for $75.2 Million
CHEVY CHASE, Md.
Alarm industry lender SLP Capital has been purchased by commercial finance lender CapitalSource Inc. in an asset purchase valued at $75.2 million. The acquisition, completed in early April, could be a lifesaver for a company that has been struggling since its main benefactor – Citizens Bank – put the clamps on what it was providing to SLP and its customers.
“Citizens reduced its lending to SLP and SLP had to squeeze its clients,” says security industry financial analyst Jack Mallon, publisher of Mallon’s Security Report. “This is a very positive thing for the industry. It’s obvious that SLP found itself in a bind.”
Co-founded by Henry Edmonds and William Polk, SLP Capital, based in St. Louis, was started in 1990 as a source of lending and financial solutions for the electronic security industry and has lent more than $400 million to security companies. Edmonds left SLP earlier this year to form The Edmonds Group, which provides consulting and investment banking services to middle-market companies.
Curt Olinger, vice president of contractor Sentry Systems Inc. in White Bear Lake, Minn., says many of SLP’s customers noticed a change in the company after Citizens Bank placed pressure on it. “When we first started dealing with them, it was great,” Olinger says. “Then the bank just put the clamps on them and it suddenly became a full-time job dealing with them.”
Mallon says CapitalSource has more than $2.5 billion in financing capabilities, whichwill relieve the financial pressure that had been placed on SLC and existing clients should feel that relief. However, Mallon warns that while CapitalSource says it plans to expand SLC’s resources, the smaller alarm companies may be left out. “The concern is they may neglect the little guy and look for the big loans,” Mallon says.
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