Dealmaker Q&A: Siris Capital on Acquiring BearCom

When Siris Capital Group, a private equity firm based in New York City and West Palm Beach, acquired voice, video and data solutions provider BearCom earlier this year, the decision was motivated by in-depth market research and a network of expert advisors. Tyler Sipprelle, a partner at Siris, talked with Middle Market Growth about their research-driven investment approach and how the firm uses a business development team of partners with relevant expertise to identify targets and grow portcos.

Middle Market Growth:  When sourcing the deal, what were you looking for in an investment target, and how does BearCom fill those requirements?

Tyler Sipprelle: Siris seeks to invest in technology companies in transition. We look for mature businesses generating significant free cash flow and providing mission-critical products or services with an opportunity to generate significant growth from next-generation technologies. BearCom closely matches this target profile. BearCom has been trusted for decades by customers across North America to provide land mobile radio systems that support critical business and security processes. With more than 60 branch locations, BearCom serves as the world’s largest integrator of Motorola’s two-way radio systems. However, we also saw that customers today are increasingly turning to BearCom to meet ever-more-complex next-generation needs across video and other physical security technologies, private data networks and distributed antenna systems. We are excited to partner with BearCom to invest in these areas where the company’s organic traction may be further accelerated through M&A.

MMG: What attracted Siris to the communication technology sector, and how does this deal fit into your broader investment strategy?

TS: At Siris, we are strong believers in the importance of investing with differentiated industry knowledge. On any investment, we collaborate extensively with our executive partners and advisors, experienced senior operating executives with backgrounds relevant to the target company. We have multiple executive partners with deep experience in communications technology and industrial technology, and they helped construct our investment thesis around BearCom. Just as importantly, our executive partners will remain heavily involved through the investment lifecycle to help identify opportunities and drive strategic and operational initiatives. We are big believers in the opportunity to create value post-transaction through strong execution and best practices.

MMG: What are some industry headwinds you’re watching in the wireless communications/security technologies space, and how will you drive growth for the company despite those challenges?

TS: New generations of technology, while offering exciting potential, are creating new challenges for customers. As an example, customers’ voice communications platforms and video surveillance platforms historically operated completely independently but today, companies are beginning to integrate those systems. These applications require data networks with greater bandwidth, and all this needs to be deployed at physical sites such as distribution centers, industrial plants or live events where an enterprise may lack employees with the requisite sophisticated IT skillsets. As a solutions provider and systems integrator, BearCom has a tremendous opportunity to meet these needs for customers.

MMG: According to the press release, this investment is expected to help BearCom expand its offerings in security technologies and private data networks, among other products. What developing cyber threats and challenges will you be keeping your eye on as they grow these capabilities?

TS: BearCom primarily addresses enterprises’ physical security challenges instead of their cyber threats.  But just like in the cyber space, we are seeing a generational step-change in physical security technology as video surveillance moves from a passive recording technology to one that incorporates artificial intelligence to deliver real-time, actionable insights. Nobody wants to play back a video to understand what happened yesterday—they want technology that identifies an incident in real-time to enable a response that keeps people secure. Again, all of this creates complexity that BearCom can address for customers.

MMG: How does a research-driven approach differentiate your firm? 

TS: We strive to invest proactively, not reactively. Together with our executive partners, we are constantly building knowledge and relationships around sub-sectors of technology where we suspect there might be investment opportunity. This foundation allows us to identify targets well-suited to our strategy, quickly understand their opportunities and challenges and articulate actionable value creation strategies. We had spent time researching the mobile radio ecosystem and had looked at several other relevant players before we ever met BearCom. This background was essential as we conducted diligence and executed the transaction, and we are hopeful that over the life of the investment, we will create considerable value through a strong partnership between Siris and BearCom.

This interview has been lightly edited and condensed for clarity.

Hilary Collins is ACG’s Associate Editor.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.