Falconhead Thinks Radar Detector Co. Is Just The Ticket
By Paul Ziobro
11/22/2005 – Falconhead Capital has bought 70% of Escort Inc., a manufacturer of high-end radar detectors.
Management will retain a stake in the company, as will American Capital Strategies Ltd., which invested $42 million in Escort in 2003. American Capital will now own 9.9% of the company, Moross said.
Falconhead chief executive David Moross declined to disclose transaction details, citing a confidentiality agreement.
American Capital's quarterly reports with the Securities and Exchange Commission shed some light on how Escort's value has grown since 2003. American Capital valued its 175,569 shares of Escort at $63.4 million as of September 30, a more than seven-fold increase from $8.8 million in 2003.
An American Capital executive declined to comment for the story.
Escort, based in West Chester, Ohio, makes radar and laser detectors for automobiles. Moross said that the company's products cost from $350 to $1500, catering more to the high-end buyer. The company has also expanded its products to include machines that analyze golf swing and Global Positioning System devices.
The company sells over 20 laser- and radar-detection products under the Escort and Beltronics brands at such retailers as Best Buy, Circuit City and The Sharper Image. Escort employs over 250 people at manufacturing facilities in West Chester, Ohio and Mississauga, Ontario.
Because the company caters to high-end consumers, Moross said the firm feels "there is a recession-resistant component" to this deal.
Moross would not disclose sales or earnings figures but said that during the past five years, Escort's sales have grown an average of 12% a year. He said the company will carry a debt load of 5.5 times its earnings before interest, taxes, depreciation and amortization, or Ebitda.
New York-based Falconhead, which invests in the leisure, lifestyle, sports and media industries, is currently raising its second fund. Its first fund, Sports Capital Partners LP, closed in 2001 with $215 million.