American Alarm’s backyard buy adds density

The company bolts on a Worcester, Mass. company, enhancing service; it also grows revenue by 15 percent, RMR by 14 percent
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Wednesday, August 28, 2013

ARLINGTON, Mass.—American Alarm and Communications is having a banner year: The company has acquired a bolt-on in its backyard that adds density and boosts the company’s service capabilities, and it ended its fiscal year with revenues that exceeded expectations.

“We had a very good year, a record year,” Louis Sampson, CFO at American Alarm, a 42-year old security company based here, told Security Systems News.

Revenues as of June 30 were more than $31 million, a growth of 15 percent over the previous year and more than the $30 million projected for 2013, Sampson said. The company also acquired Sentinel Security Systems of Worcester.

Sentinel, in business since 1995, brought about 400 “very well maintained and very well cared for” mostly residential accounts to American Alarm, increasing its density “right in our core territory” of central Massachusetts, Sampson said.

Sentinel’s operations will be merged with American Alarm’s facility in Auburn, Mass., just outside of Worcester. Sentinel’s customers will be monitored by American Alarm’s UL-listed central station here.

Adding density will enhance the high quality service American Alarm already offers, Sampson said. “We have more men in a van, so to speak, handling service than anybody else we know of in our market,” he said. “… When we build our density, it not only helps ensure being able to get a man in a van quickly [because customers are in the same geographical area], but it also gives us the scale to really continue to hire top level field service staff and technicians.”

Fran Cahill, owner of Sentinel, will join American Alarm, which has more than 180 employees, as an integrated systems consultant. Sampson said Cahill will focus on sales because “he is a talented and gifted salesperson and that is what he really loves to do.”

In fact, Sampson said Cahill decided to sell because he was basically running his company “kind of like a one-man show,” and had less time for sales as his customer base grew.

Now, Sampson said, “it’s wonderful to have his sales ability to brought to our Worcester [Auburn] branch … He will continue to help grow that branch.”

Sampson said that in addition to American Alarm’s top-line revenue growth, RMR, which is now at about $1.1 million, also grew by 14 percent.
He attributes the growth to talented sales staff, a focus on service and new acquisitions.

The Sentinel acquisition is American Alarm’s third in about a year and a half, Sampson said. The company, which has more than 20,000 customers, expanded into Rhode Island in 2012 with the purchase of Electronic Alarms in Warwick, R.I. and later that year it bought P&J Alarm of Greenwich, R.I. The company also has offices in Randolph, Mass. and Windham, N.H. and does business in 13 states.

Sampson said that when it comes to acquisitions, “we have a number of others at various stages right now as well; we’re always working on new ones.”

But he said American Alarm is “strategic and judicious” about what companies it acquires, looking for ones that provide the same level of service to their customers that American Alarm does.

“We have more and more people approaching us all the time,” Sampson said.

That’s partly because a growing number of security company owners are reaching retirement age and looking to sell, he said. But he believes it also has to do with American Alarm’s reputation.

“The focus on service is what we think has really helped selling companies to be interested in us,” he said. “Because what we’ve found is that most selling companies need to have a sense of confidence that the company that they’re merging pays as much attention and care to reactive and proactive field service.”