The hard part is behind us.
That is the message from Perry Mehta, the Detroit-area entrepreneur whose FutureNet Group has agreed to buy Smith & Wesson Security Solutions in Franklin. After two years of posting big losses, the manufacturer of security barriers is poised to grow again, Mehta told NashvillePost.com, by tying its services into FutureNet's other businesses and targeting overseas contracts. He says he expects the venture to be back in the black in the next six to 12 months.
Mehta last week visited the Cool Springs operations of Smith & Wesson Security Solutions — the former Universal Safety Response — and told its roughly 80 employees that their jobs are safe and that their work will not move elsewhere. Mehta, whose holding company specializes in contracting with government entities on infrastructure projects, has paired up with the former USR in recent years. He sees great opportunities in aggressively co-marketing the companies' services and says that having the security fence business under the Smith & Wesson gun-making umbrella "was not exactly the right fit."
FutureNet is paying about $10 million for Smith & Wesson Security Solutions, for which founder Matt Gelfand fetched about $80 million three years ago.
"The pricing is certainly right," Mehta said. "It's a good deal, but more than that, this is about the potential that comes with it."
Smith & Wesson executives did a lot of the dirty work in the past 18 months to help set up Mehta's optimism. After government customers pulled back from spending, they took impairment charges of about $90 million and laid off more than a dozen of people before putting the business on the block last fall. Mehta said he is "very comfortable" with the business' overhead today and already has put in project bids incorporating the security fence business.
At this point, Smith & Wesson Security Solutions can grow more than 20 percent from its 2011 revenue base of $30 million without having to add workers or equipment, Mehta said. He sees $20 million worth of potential contracts in international locales, including from Middle East countries with growing security concerns. Combining those initiatives with domestic growth from domestic government customers could over time lead to the recovery of some of the jobs lost last year.
"If the international work picks up, we would add more workers," he said.