Rockbridge buys Connect America in third 'largest PERS deal ever'

Second security industry investment for Rockbridge Capital
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Thursday, January 20, 2011

DETROIT—It’s the third largest personal-emergency-response-system company purchase, and it bodes well for the PERS industry, according to Connect America president and CEO Ken Gross.

Rockbridge Growth Equity on Jan. 12 announced it had acquired direct-to-consumer PERS company Connect America for an undisclosed sum in a deal that brings 75,000 accounts worth around $2.2 million in RMR to investor Rockbridge, according to Gross.

“The PERS industry should be proud of this transaction—this is a great partner. They own Protect America, which is the largest do-it-yourself security company and now they own one of the largest do-it-yourself PERS companies,” Gross said. “The biggest thing this gives us is a strong partner and the money to grow.”

Rockbridge partner Kevin Prokop said PERS was a good fit for Rockbridge, which last year made its first foray into security with the purchase of Protect America.

“We think it’s a very attractive industry. It has high growth rates, fueled by the increased number of senior citizens, increased awareness of the product and a general desire among seniors to age at home,” Prokop said. “There’s plenty of value in the whole value chain.”

Monitoring for Connect America’s PERS solutions is provided by Rapid Response’s exclusively PERS-focused monitoring division Life Safety Monitoring.

“We have had the privilege of doing the monitoring for Connect America from the beginning. As their PERS business grew, we formed the Life Safety Division to focus on this monitoring with EMT training for our Life Safety operations team,” said Rapid Response CEO Russ MacDonnell. “We believe that the combination of Connect America with Rockbridge will continue to accelerate their growth in a market that will significantly expand over the next five years. We are very pleased to be one of Connect America’s earliest strategic partners in supporting their high growth business model.”

Gross said he was excited about the cross promotional opportunities the acquisition brought to Connect America.

“They own One Reverse Mortgage—they’re the second or third largest reverse mortgage companies in the U.S.,” Gross said. “We’re already going out in their packages and they’re in our boxes.

Prokop agreed cross-promotion potential was very appealing.

“We are currently cross-marketing medical alarms to prospect reverse mortgage customers through One Reverse Mortgage. Both products serve the same demographic and both products help seniors live in their homes and maintain their independence,” Prokop said. “We will also be looking at opportunities with Protect America and Quicken Loans.”

Rockbridge owns equity stakes in Ready Financial Group, Protect America, Northcentral University, One on One Marketing and One Reverse Mortgage, and has a strategic partnership for direct-to-consumer distribution with nationwide pharmacy chain CVS. However, Prokop said there was a lot of opportunity for security dealers going forward.

“Connect America has a dealer program and will be looking to add dealers in the coming years,” he said.

The largest PERS transaction was Phillips’ purchase of LifeLine for $750 million in 2006 and the second was Phillips’ purchase of Health Watch for $130 million in 2007.