Copstat Security, Inc.

Bronx, New York

has been acquired by

Theo Capital (DFW Partners, Meridien, Madison)

Short Hills, New Jersey

Capital Alliance Corporation initiated
this transaction and assisted in its closing.

Copstat Security, Inc.

Copstat Security Inc. is a provider of contract security and investigative services in the northeastern United States. With the aid of Capital Alliance, Copstat sold its business to ?a syndicate of four financial companies led by Theo Capital, a company with a long acquisition history.

Copstat provides security officers to banks, retail and healthcare properties, Class A and B commercial buildings, executives and celebrities, and hotels. Based in New York and founded in 1985, it had grown to over fifteen hundred employees with six offices on the east and west coasts, with high-profile accounts including the Empire State Building, Citicorp, CBS, the New York State MTA, Yankee Stadium, the Met Life Building, Carnegie Hall, and World Wrestling Entertainment, LLC.  When the company’s president decided to liquidate his 100% interest, he secured the services of Capital Alliance.

Capital Alliance generated offers from several strategic and financial acquirers with security industry expertise and substantial capital for future growth initiatives. However, Copstat\'s focus on high profit margins did not fit the industry model.  As a result, offers from strategic buyers vastly undervalued the company and its prospects.  In addition, the CEO of the company desired to leave completely following the transaction, further complicating the ability to negotiate a high value.  Capital Alliance conducted a comprehensive search and pieced together a group of financial companies to participate in a high value, platform transaction.  The entire transaction then hinged on finding a replacement CEO who could assume responsibilities seamlessly. After conducting a number of interviews, Capital Alliance negotiated the backing of the COO of Copstat. ??

Capital Alliance negotiated 100% cash at closing (extremely rare in middle market transactions with private equity buyers), relief from corporate debt, deferred debt payments, a consulting contract, and future performance bonuses. The negotiated value was double what strategic buyers were willing to pay.