Here’s a look at two select Gryphon portfolio company case studies—evidence of the firm’s strategy and strength in the Business Services, including our focused efforts around partnering with management teams, optimizing operations and pursuing strategies that cement market leadership.
The use of credit or debit cards instead of cash has become commonplace for today’s consumers. Combine this trend with the move by many financial institutions to outsource management of their point of sale (POS) systems, and Rocklin, California-based TASQ Technology was poised at the center of a hot finance market. Gryphon’s proprietary analysis and in-depth industry discussions revealed that TASQ had the management and technical depth that could be leveraged for market growth and leadership.
In 1998, the founders of TASQ and Gryphon completed a leveraged recapitalization that provided the company with capital to fuel market expansion while providing the founders with sizable personal liquidity. In partnership, Gryphon and TASQ management aggressively pursued a plan to solidify TASQ’s position as the predominant industry player. A successful growth strategy was executed that ultimately included two add-on acquisitions. In parallel, the company built a 100,000 square foot state-of-the-art facility to service the dramatic increases in volume. Revenues doubled to $100 million in just three years. Viewed by strategic parties as the leader in its field as a result of these efforts, TASQ was acquired by First Data Corporation in 2001, providing Gryphon with a return of 4x our original investment.
Gryphon’s investment in CFP was a result of its proactive targeting of the multi-billion facility services sector, with a focus on services requiring higher skilled labor. The fire-life safety services niche within facility services is a multi-billion dollar, highly fragmented space with attractive regulatory drivers and secular trends, including large property users that have increased their use of outsourced providers for recurring fire-life safety services.
Gryphon identified CFP through its relationship network, and in partnership with Executive Advisor Jerry Rose (former Vice Chairman of real estate and property services firm Jones Lang LaSalle), completed the acquisition in February 2005. A world-class CEO and CFO were recruited soon after the closing of the transaction. In addition, Gryphon’s operations and deal team, along with management, implemented numerous successful growth initiatives. Together, the team built out a high-growth national accounts group, established de novo offices, added proven and high performing district managers and service personnel, transitioned to a new MIS platform and improved metrics and reporting. Gryphon also led two strategic add-on acquisitions adding critical alarm system capabilities in California and Arizona. The result was CFP was soon positioned as the leading independent fire-life safety provider in the western United States, with leading regional market share as an installer of fire-life safety systems, and a “best in breed” national accounts service business. Growth was robust and EBITDA tripled over an approximate 3 year period.
Gryphon exited CFP in 2007, realizing a 3.3x return on its aggregate investment of $35 million.