Cascadia Capital Represents Lenel Systems International in Sale to United Technologies

Challenge

Lenel Systems International is a Rochester, NY-based provider of software and integrated security systems for the corporate and government security markets. The leader in software for integrating security systems, Lenel has seen massive revenue and profitability growth over the last five years. Given accelerating M&A activity in the security market, Lenel had fielded several inquires and offers to buy the company. Cascadia Capital was tapped to represent Lenel given the firm's deep domain expertise in both the security and IT industries and its strong relationships with a broad base of potential global buyers.

Solution

Cascadia Capital understood the impending convergence of the IT and security industries and was able to clearly articulate Lenel's vision and value to potential buyers. Packaged in a way that would resonate, the Lenel growth story produced multiple expressions of interest from large IT, security and industrial companies. Cascadia Capital's disciplined management of the M&A process helped drive valuation well above the initial levels, and eventually ensured that Lenel management was willing to sell the company to diversified systems giant United Technologies. A global powerhouse, United Technologies is the 51st largest U.S. corporation with revenues exceeding $37 billion in 2004. Also the 22nd largest manufacturer in the U.S., United Technologies is focused on providing intelligent solutions for buildings and commercial facilities.

Results

With Cascadia Capital's guidance and disciplined execution process, Lenel received a valuation of $400 million, which exceeded comparable public companies and M&A valuations in the security industry. In exchange, United Technologies gained access to an enormous channel of resellers and a market-leading company that sits at the impending convergence of physical and network security. The strength of United Technologies' businesses, coupled with Lenel's leadership position, should create a new contender for global security solutions.