Indianapolis-based CertaSite wants to become a big fish in an extremely large, but highly fragmented, pond. And it’s been on an acquisition tear to make it happen.
The 4-year-old firm bills itself as a “commercial fire protection and life safety company.” Put simply, CertaSite is a sort of one-stop shop for all the fire prevention and protection needs that building owners must attend to in order to meet city, state and federal fire regulations.
It can handle everything from nuts-and-bolts issues such as determining how many fire extinguishers a particular structure needs to installing and servicing them and reporting that work to the appropriate regulatory agencies.
But the firm’s brief covers far more than fire extinguishers. The company can install and maintain everything from alarm systems to sprinklers and provides first aid resources and 24/7 electronic monitoring of safety systems.
“Our focus is on fire protection and making sure that the equipment and systems needed for this are properly installed, inspected, maintained and repaired,” said CEO Jeff Wyatt. “We install it, and then we maintain it.”
And it’s gobbling up companies quickly to expand its reach. Last month, it announced the acquisition of Midwest Fire Protection, a family-owned and -operated company that serves southern Michigan. The acquisition was CertaSite’s seventh in Michigan and its 16th overall.
It has acquired two more firms since then.
Consolidating an industry
Wyatt worked in the fire safety business for three decades before he joined CertaSite at its 2018 founding. Most recently, he served as president of Indianapolis-based Koorsen Fire & Security, one of the fire safety niche’s larger privately owned companies. Though, given the industry’s extreme fragmentation, that’s not saying a lot.
Chris Jelenewicz, chief engineer at The Society of Fire Protection Engineers and editor of Fire Protection Engineering Magazine, said the industry is so diffuse that there are no accurate numbers for how many U.S. companies are involved. Adding to the confusion, many firms specialize in only one aspect of fire safety.
“There are so many people doing so many different things,” Jelenewicz said. “It’s such a big business that there are around 8,000 engineers in the United States just doing work for fire protection. Sometimes, you’ll just see a fire alarm company or someone who only deals with sprinkler systems, and maybe another that only does fire extinguishers.”
He hasn’t heard of CertaSite but said the company’s concept for a one-stop shop is fairly novel. That makes CertaSite something of a first mover.
Wyatt started to see the potential of consolidation back in 2013, when he helped his former employer expand across the Midwest.
Large investment and finance firms also spotted the opportunity, including The Riverside Co., a global private equity firm with more than 200 current plays in the business services niche.
New York City-based Riverside had already invested in a few fire-protection companies when it formed CertaSite in June 2018 to bring them together under one platform.
“The market for fire protection businesses is stronger than ever, and it’s a great time for founders to sell,” said Riverside partner Alan Peyrat in the press release that announced CertaSite’s formation the year after it began. “We are specifically looking for full-service fire protection companies, specializing in the sales, service, inspection and design of fire and life safety equipment including extinguishers, sprinklers, alarm systems and suppression systems.”
Their views closely mirrored those of Wyatt, who came aboard to lead the effort.
“It was an opportunity to have some ownership in a company, but also have the power of an investor behind me so that I could do all the things I wanted to do with the business,” he said.
What he wanted to do—indeed, what he’d wanted to do for a long time—was consolidate the fire protection industry, much of it composed of mom-and-pop entities, into something bigger, to which things like service standardization, centralized management and economies of scale could be applied.
“I had a lot of experience in this business and wanted to start my own,” Wyatt said. “Riverside was looking for someone to help them start a business like this, so it was a great opportunity to come together. It’s been a heck of a ride these last four years.”
It certainly has. Since its debut, CertaSite has used Riverside money to purchase 18 small operations at an average of roughly $1 million per deal.
“We are now in 18 different markets,” Wyatt said. “We went from me being the only employee to just about 350 employees today.”
Thirty-eight of those employees work out of company headquarters in an office building just off of Interstate 69 at East 96th Street.
Those CertaSite locations are peppered around the Midwest—in Michigan, Wisconsin, Illinois, Ohio, Kentucky, Pennsylvania, Iowa and, of course, Indiana. Most of the acquisitions were well-run but smallish family businesses with plenty of history and street cred in the communities they served.
To that, CertaSite wants to add (among other things), advanced management practices, expertise in a full-spectrum array of design and installation services, and information technology that can keep a close watch on clients’ maintenance schedules and inspection regimens.
“A lot of our customers are managing not only a fire and life safety schedule—which might include fire, sprinkler, fire alarms and kitchen hoods, all of which require different cycles of maintenance service from every five years to six months to monthly—but they’re also managing other vendors besides,” said Kelly Henderson, CertaSite’s chief strategy integration officer. “It’s a lot for them to have to manage, and we just want to make it as simple as possible as well as make sure the systems work when needed.”
More to come
Wyatt said the goal is to make fire protection and workplace safety easy for customers.
“Technology is a big part of this,” he said. “It’s taken us quite some time to get it where we want it to be, but it’s really coming together now.”
CertaSite plans for continued, and accelerating, expansion. Indeed, an entire section of its website is devoted to answering the questions of small operators interested in being acquired and spelling out exactly how to go about it.
“We’ll probably do another 20-plus acquisitions over the next two or three years,” Wyatt said. “We’ll ultimately have about 40 locations here in the Midwest.”
Though he won’t talk about the company’s current spreadsheet, Wyatt said that, in a decade, he hopes to bring in some $500 million in annual revenue.
CertaSite’s backer, Riverside, certainly remains bullish on the fire protection industry. So bullish, in fact, that its portfolio now includes another such company named Performance Systems Integration, a West Coast operation currently gobbling up fire safety companies in the Oregon, Washington and Idaho region.
Perhaps someday, the two will lock horns—though that seems improbable, given Riverside’s position with both. The two, though separated by a great deal of geography, currently enjoy a close, collegial relationship. The CEO of Performance Systems Integration sits on CertaSite’s board, and Wyatt sits on Performance System Integration’s board.
“It give us a chance to share a lot of ideas as we both navigate all the different challenges we’ve seen,” Wyatt said.
CertaSite wants to expand into Missouri, Kansas, Tennessee and West Virginia. For starters.
“I would say that the sky’s the limit,” Henderson said. “Our initial task is obviously the Midwest, but I think we’re in a position to go as far as the entire United States.•
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Extinguishing the competition.