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Cinven invests in Pronet

European private equity firm Cinven has reached agreement to acquire a majority stake in Pronet Güvenlik (Pronet), a provider of security electronic alarm systems in Turkey.

 

Pronet has been acquired from its institutional shareholders including Turkish Private Equity Fund I LP, advised by Turk Ventures Advisory Limited (Turkven), and Dutch Development Bank (FMO). The transaction is subject to regulatory clearances and it is expected to close during summer.

Pronet is the leading electronic security systems company in Turkey, primarily installing and monitoring residential and commercial alarm systems, as well as installing integrated electronic systems. It has more than 130,000 residential and commercial subscribers across Turkey and has a recurring revenue stream from its installed customer base. In the past four years, its subscriber base has grown by a CAGR of more than 40%. Pronet has unmatched security expertise and provides unparalleled customer service in the Turkish market.

Established in 1995, Pronet is headquartered in Istanbul with operations across Turkey through its own offices and dealer networks. It has customers across 81 cities and employs around 1,500 staff.

Penetration of the Turkish monitored alarm market remains relatively low compared to Europe and the US. Increasing penetration is supported by rising Turkish disposable income, favourable demographics, greater urbanisation and awareness of security risks. Cinven, along with management, expects to further grow the business through additional expansion of Pronet’s direct and indirect sales capabilities across Turkey and the surrounding region.

Alex McNutt, Chief Executive Officer of Pronet, will lead the management team with extensive experience in the residential and SME alarm market. He joined Pronet as Chief Executive Officer in April 2010 and has significant prior experience at ADT, where he was President of Europe and South Africa.

Yalin Karadogan, Principal at Cinven, says: “Pronet has a very experienced management team and we look forward to working with them as the Company enters its next phase of growth. We believe that Turkey presents considerable investment opportunities given it has the second largest population and sixth largest economy in Europe with a strong medium-term GDP growth outlook. We have been able to originate and execute this investment through our significant industry expertise and our in-depth knowledge of Turkish market dynamics. We will also review opportunities to expand Pronet’s business internationally in surrounding regions where there are low levels of penetration in the alarm market, such as Eastern Europe, Middle East and Asia.”

Guy Davison (pictured), Partner at Cinven, says: “Our investment in Pronet clearly demonstrates our ability to identify companies with strong growth prospects within Europe and, in particular, Emerging Europe. Our Business Services team had undertaken significant research in the European alarms monitoring market, given the unique visibility of recurring revenues and growth prospects in this relatively resilient sector. We had been following Pronet for a long time as Turkey’s leading security brand, the fastest growing company in its field in Europe and given its exceptional service quality.”

 

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