Interface sells Hawk Security to ACA

Purchase grows ACA ‘20 percent overnight’ and gives it brick and mortar in Texas
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Wednesday, January 15, 2014

NEWTOWN SQUARE, Pa.—Alarm Capital Alliance had a robust 2013, with RMR growing nearly 14 percent and gross revenues by about 23 percent. Now, its purchase of Interface Security Systems’ Hawk Security adds immediate growth for 2014 and gives the company a new strategic position in Texas that promises even more.

“I just grew the entire company 20 percent over night with this deal,” Amy Kothari, president and CEO of ACA, which is based here, told Security Systems News. Terms of the buy were not released, but Kothari said it brought ACA 27,000 accounts and $900,000 in RMR.

She called the acquisition of Fort Worth, Texas-based Hawk, completed in early January, “such a tremendous opportunity for us.”

Kothari said that Interface “is focused so much on the large commercial bundled services side of the business and they made a decision to spin off their residential portion of the business, … so it was a nice way for us to get 27,000 primarily residential accounts [and a small number of small business accounts] in a very concentrated market that we’re already familiar with.”

ACA already had about 12,000 accounts in Texas. The Hawk purchase more than doubled that.

ACA also is keeping Hawk’s 130 staff members. Mike Shirley, Hawk regional VP, will stay on as VP and general manager. Hawk has won awards for being the best place to work in the Dallas metropolitan area, and Kothari said that “one of the things we really liked at Hawk was the morale and the energy and the passion” of its staff, many of them long-term employees. The company will operate under the name of Hawk Security, a member of My Alarm Center, which is ACA’s direct-to-consumer umbrella name.

ACA also now has Hawk’s offices in the Dallas/Fort Worth and San Antonio areas. That gives ACA the brick and mortar it didn’t have in Texas previously, which will allow ACA to service its customers itself instead of paying more to subcontract for service, Kothari said.

“So there are some synergies here as well. I have a chunk of customers there today that I will be able to service at lower cost,” she said.

Hawk had many longtime customers, a number of them still using landlines, so “there are some tremendous opportunities for upgrades here and to offer additional services,” Kothari said.

ACA in recent years also have been focusing on honing the customer experience as a way to differentiate the company from competitors, she said. “So we view this a tremendous opportunity to go in there and really drive home on that customer experience, that white-glove service, and really improve on customer loyalty,” Kothari said. “That translates into [lower] attrition, opportunities to upgrade the customers, and more revenue from them. I think we’re in a great position to do that.”

Founded in 2000, ACA has a quickly growing dealer program but focuses mainly on completing bulk account acquisitions.

At the end of 2013, ACA had $4.99 million in RMR, up 13.6 percent from the $4.39 million it had at the end of 2012. Gross revenues had climbed to $58.9 million, up from $47.9 million in 2012. The number of employees had grown from 184 to 322 and subscribers exceeded 145,000.

With the addition in 2014 of the Hawk customers, ACA now serves more than 170,000 customers nationwide.

Interface will continue to own and service 12,000 Hawk commercial customers in Texas under the Interface brand.

Imperial Capital was the exclusive advisor to Interface during the transaction.