Private Equity Firm Takes Stake in Shred-It
Shred-it, Oakville, Ontario, has sold a significant stake of its business to a consortium of private equity groups led by Birch Hill Equity Partners Management Inc., Toronto.
Birch Hill partnered with Toronto-based Westerkirk Capital in the deal, which was financed by National Bank of Canada and Toronto Dominion Bank.
According to published reports, the private equity firm has invested nearly $100 million in Shred-it, which services more than 150,000 clients on five continents from more than 140 locations.
A spokesman for Birch Hill will not divulge the nature of the company’s stake in Shred-it, but notes that the secure destruction company appeals to Birch Hill because of its growth story as well as its approach to customer service. (For a profile of Shred-it, see "Re-Branding Effort," in the May/June 2007 issue of SDB magazine.)
Another factor that impresses Birch Hill is Shred-it’s "route logistics." The company says Shred-it has a high density of clients and efficient trucks dispatched to collect and destroy documents. "We’ve found that with other companies we’ve owned, if you get that right, the business can work well," the company’s spokesman says.
Imperial Capital of Los Angeles initiated the recapitalization of Shred-it and acted as the company’s only financial advisor in the deal.
The family of Greg Brophy, the founder of Shred-it who died in a float plane crash in September of 2007, will continue to own a significant stake in the company and will remain on its board of directors.
Tracey Brophy, owner of Shred-it, says, "Imperial Capital was engaged by the company due to their significant relationships and experience with middle-market companies and private equity funds in successfully executing mergers and acquisitions, capital markets and restructuring transactions."
Robert Warshauer, managing director and head of New York corporate finance at Imperial Capital, says, "We were pleased to have an opportunity to work with Shred-it and the Brophy family in structuring an optimal transaction for all parties and identifying great equity partners, Birch Hill Equity Partners and Westerkirk Capital."
TJX Settles with State Attorneys General Over Data Breach
TJX Cos. has settled with 41 state attorneys general in relation to the company’s failure to protect its customers’ financial information and guard against a large data breach that affected thousands of customers from July 2005 through December 2006.
The breach, which the company announced in January 2007, exposed at least 45.7 million credit and debit cards to possible fraud.
As part of the agreement, TJX, the parent company of T.J. Maxx and Marshall’s, has agreed to pay $9.75 million to the states and to implement and maintain a comprehensive information security program, designed to safeguard consumer data and to address any weaknesses in TJX’s systems at the time of the breach.
Under the settlement, TJX also has agreed to:
• Provide $2.5 million to establish a new Data Security Fund for use by the 41 states involved in the agreement to advance effective data security and technology;
• Provide a settlement amount of $5.5 million together with $1.75 million to cover expenses related to the states’ investigations;
• Certify that TJX’s computer system meets detailed data security requirements specified by the states; and
• Encourage the development of new technologies to address systemic vulnerabilities in the U.S. payment card system.
Following the data breach, 11 indictments were announced by the U.S. Attorney General last August. To date, two of these indicted cyber criminals have pled guilty, and two other individuals have pled guilty to related charges.
The 41 states participating in the agreement are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin and the District of Columbia.
Cintas Achieves AAA Certification for its North American Operations
The Document Management division of Cincinnati-based Cintas Corp. has announced that all 70 of its document destruction operations in North America have achieved AAA certification from the National Association for Information Destruction (NAID), Phoenix. Cintas says it is the first company with a national footprint to achieve this standard.
Of the company’s 70 destruction operations, 67 are in the United States, while three operate in Canada.
"Cintas takes tremendous pride in becoming the first company to achieve NAID certification in North America," says Karen Carnahan, president and COO of the Document Management division of Cintas. "This prestigious designation is a reflection of our investment in state-of-the-art systems and commitment from our dedicated team of employee-partners working to exceed customer expectations every day."
Cintas established its Document Management division six years ago. The company claims it serves 86 percent of the 150 largest markets in North America.
Nova Records Management Joins Cornerstone Records Management Fold
Cornerstone Records Management LLC, based in Columbia, Md., has announced its acquisition of the assets of Nova Records Management, based in Berwyn, Pa.
"We are very excited about having Nova become part of Cornerstone," says Steven Sisney, president and CEO of Cornerstone. "Nova gives us a very attractive platform from which to grow our business in the Northeast and Mid-Atlantic markets."
He adds, "We are impressed with how the Nova management team has acquired and integrated a number of smaller businesses over the past several years and has become one of the largest players in our industry today."
Among Nova’s successful acquisitions were Accurate Archives, Eagle Archives, Archives Services, Braincore and Copy Request.
Sisney says Cornerstone’s acquisition strategy involves "looking for acquisitions that are either in or adjacent to our existing footprint for our existing service offerings or acquisitions that can expand our service offerings."
In addition to its acquisition activity, Cornerstone is also pursuing organic growth. The company opened two new facilities in the California market in the second half of 2008 and a records storage center and a separate media vault in the Denver area in May of 2009.
"Our organic growth strategy is tied to expanding our customer base of both vended and unvended customers," Sisney says. "We are investing in additional sales staff. We will also evaluate adding new facilities in markets where suitable acquisition targets are not available," he adds.
"We are committed to investing in opportunities that will increase the rate of our organic growth as well as making selective, complementary acquisitions," says Rick Elfman, senior managing director for Sterling Partners, a private equity firm with offices in Chicago and Baltimore. Sterling is the lead investor in Cornerstone.
Cornerstone will continue to do business as L.A. Records Management in the Los Angeles area, as Cornerstone Records Management in the Denver market and as Nova Records Management in the Northeast and Mid-Atlantic markets.
Nova operates facilities in Massachusetts, Rhode Island, New Jersey, New York, Pennsylvania, Maryland, West Virginia, Delaware and Washington, D.C.
Cornerstone Records Management LLC entered the information management market in 2008 with the acquisitions of L.A. Records Management Inc. and Microshred Inc. Serving a broad customer base, Cornerstone provides storage and management of hard copy records, on-site and off-site document destruction services, electronic media vaulting and digital imaging services. More information is available at www.cornerstone-rm.com.
Archive Systems Expands Arizona Storage Facility
Archive Systems Inc., headquartered in Fairfield, N.J., has announced the addition of a new business records storage facility near its western regional records center in Phoenix.
"In today’s economy, companies are trying to cut costs wherever they can," says Andy Koval, executive VP of Archive Systems. "They are turning to Archive Systems because they know we will reduce their business records storage costs without compromising quality or service." He adds that the company’s reputation has led to growth in the Phoenix area.
The additional Phoenix facility will incorporate barcode tracking, system-driven workflows and records management systems. Archive System’s services include secure document storage and retrieval, delivery, indexing and document destruction.
DataChambers Expands Operations
North Carolina-based DataChambers has announced plans to build a second data center on its 80-acre Winston-Salem campus. The company also plans to expand its existing data center for the second time in less than a year by an additional 1,500 square feet.
Data Chambers reports that the two projects represent an investment of more than $7 million and will more than double the company’s capacity.
"We’re responding to a strong growth in our business—fueled by companies trying to do more with limited budgets," says Nicholas Kottyan, CEO of DataChambers.
The company’s new data center will measure 20,000 square feet. The space is 18 feet underground in a blast-resistant structure. Interior demolition is underway, and Data Chambers says it expects construction to begin in the fall.
NAID, PSI Seek Better Dialog on Specifications
The Standards and Practices Committee of the Paper Stock Industries (PSI) Chapter of the Institute of Scrap Recycling Industries Inc., Washington, D.C., and the Global Fiber Committee (GFC) of the National Association for Information Destruction (NAID), Phoenix, have agreed to form a liaison position to continue cooperation and collaboration in the area of recycled paper specifications.
According to information posted to the NAID Web site, Kevin Duncombe of Western Pacific Pulp and Paper, who currently sits on both committees, will serve in the newly created post.
According to GFC Chair Sheldon Greenspan of Hanaar Corp., Mississauga, Ontario, "This is a big first step to ensure that NAID members have representation in matters related to wastepaper specifications and protocols as they specifically relate to the information destruction industry."
Access Makes Executive Appointments
Access Information Management, Pleasanton, Calif., has announced two executive appointments.
The company has promoted former Executive Vice President Rob Alston to the new role of president, operations and business development.
In addition, John Chendo has joined Access in the role of president, finance and strategy. He is responsible for all financial operations and leads the company’s acquisition strategy.
Chendo has served on the board of directors for Access since sponsoring the company’s founding in 2004.
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