Cornerstone Detention Products

Cornerstone Detention Products

Company Overview

Leading provider of services and engineered detention products, furnished and installed, in the United States and Canada.

Leading detention contractor; the security group includes the brands of Airteq®, Trentech®, and ECS® as well as facility maintenance and service operations. Portfolio company of The Gores Group.

Situational Overview

As part of our technology-enabled and outsourced services practice, BCA had identified Cornerstone as an industry leader and had been meeting and discussing strategic alternatives with Mitch Claborn for about 18 months.

Norment, a portfolio company of the private equity fund The Gores Group, was put up for sale in the second half of 2013. However, this process stalled and did not yield a successful transaction.

Cornerstone and BCA saw an opportunity to build the industry leader by combining the two companies. BCA contacted the Gores Group directly and submitted a Letter of Intent that incorporated a very aggressive closing timeline and a mutually acceptable valuation.

Both companies were emerging from a cyclical trough in the detention construction industry, and Cornerstone was keenly interested in financing the acquisition of Norment while minimizing dilution.

BCA Strategy

BCA believed the transaction could be funded solely with debt.

Because of the limited time allowed by the seller to close the deal and the buyer’s desire to minimize dilution, BCA identified a handful of unitranche lenders that could provide all the financing and close rapidly.

BCA assisted management in preparing materials for lenders that highlighted the strategic value and significant cost synergies that could be achieved through this acquisition.

Transaction Result

Cornerstone Detention Products acquired Norment Security Group at the valuation recommended by BCA and within a timeframe acceptable to the seller.

The acquisition combined the second and third largest players in the detention contracting industry to create the largest company in the industry.

The acquisition was funded entirely with debt, avoiding any shareholder ownership dilution.

Acquired
Undisclosed

“I want to thank each member of the Brentwood Capital Advisors team for all of your hard work and dedication through Cornerstone’s acquisition of Norment Security Group. As our financial advisor, Brentwood Capital Advisors helped us move quickly to take advantage of this opportunity and worked diligently to close the transaction under a tight timeline. The result of this transaction is a great outcome for Cornerstone and Norment, and we are excited about the future. Your firm is a first class organization!”

- Mitch Claborn
President & CEO, Cornerstone Detention Products