Monitronics sees a second capital funding round in 2002

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Monday, April 1, 2002

DALLAS-Monitronics International Inc. in March announced that it had recapitalized the company with an additional $90 million from thirteen banks and five different investment entities. This marks the second time in a year the company has received an infusion of capital to grow its dealer program and expand the amount of

funding available for account acquisitions, company officials said.

The latest installment increases the monitoring company's capital base to $500 million, funds that will likely allow the company to proceed with its growth plans for the next few years, said Michael Gregory, director of marketing for Monitronics.

"We have plans to continue to expand our dealer base and add new dealers, and continue to expand the accounts that we are acquiring," Gregory said. In May, the company received $70 million from private equity sources so it could increase its acquisition of long-term monitoring contracts.

The company now monitors more than 350,000 accounts for about 300 dealers around the country, and announced a year ago that it had reached $100 million in annual sales.

Jim Hull, president and chief executive officer of Monitronics, said the company's services offering with the new investment wouldn't change dramatically; part of the company's strength is its sharp focus on steady, continued growth, he said.

"It's business as usual for us," Hull said. "The real message is that the investment community continues to have a very enthusiastic interest in us."

One investor has invested in the company at least once before; another, Northwestern Mutual, is a prominent member of the investment community, fastidious about due diligence, Hull said.

Despite the deceptively simple recurring revenue model of the security monitoring industry, not all companies attempting to make it in the monitoring business succeed, said Marty Friedman, managing director for CIBC World Markets, an investment house that has served as Monitronics' senior bank since 1996.