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Imperial Capital

Who will buy AlarmForce?

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Tuesday, August 7, 2012

AlarmForce, a super-regional security company based in Toronto, announced that its board of directors is taking a look at selling the company. The company has hired Imperial Capital to help it with a possible sale.

The company's market cap value today is listed as $135m and its enterprise value is $119m.

I asked Richard Ginsburg, former CEO of Protection One who is now managing partner at G3 Capital Partners, what he thought about the sale of AlarmForce. He said he thought the company is well run and that CEO Joel Matlin "has done a fabulous job of identifying a segment of the market open to value-oriented products (like their new video offering) at prices that are at or lower in comparison to traditional systems with basic offerings."

Ginsburg also said he believes "a company like AlarmForce is in a great position to compete with the likes of industry leader ADT and the emerging cable and telecom companies because of [AlarmForce's] single-minded focus on enhanced services like two-way voice and now video services." He added that he believes "some of the traditional companies are in a weaker position to compete in comparison."

Ginsburg predicted the company will get "good interest"  and said Imperial Capital has "formed a great niche in the M&A sector so they are a good choice [to help out with a sale.]"

The last time I spoke to CEO Joel Matlin was back in the winter of 2010 when he was opening a fourth office in Minneapolis/St. Paul.It has offices in North Carolina (opened in 2005), Ohio (opened in January 2006)  and it opened an office in Georgia in 2007.

AlarmForce does security alarm monitoring, personal emergency response monitoring, video surveillance for resi and commercial customers. Something that’s unique about AlarmForce is that it manufactures and installs its own two-way voice home alarm systems. When I did that interview, AlarmForce had 103,000 accounts in Canada and the U.S., which Matlin told me was up from 56,700 accounts in 2006. Today the number of accounts is closer to 125,000.

“Canada is a tough country to do business in. It’s got a population the same as the state of the California, but it’s spread out over a country that’s much larger than the U.S.,” Matlin said. In addition to dense population centers that are easier to penetrate, “the perception of crime is stronger in the U.S. than it is in Canada.”

Wonder who some potential buyers might be? One possiblitiy, in my opinion would be Stanley, which expanded its resi business in Canada last summer with the purchase of Microtec Security Systems. It got 80,000 accounts and additional bi-lingual monitoring capability out of the deal.

Or I suppose AlarmForce could be a bolt-on for a telecom that’s getting into the security business. Rogers Communications maybe? Here’s a video from the summer of 2011 where we talk about Rogers Communications working (in secret!) with iControl to get into the security industry.  And here’s a story about the deal.

AlarmForce board of directors has formed a committee of independent directors to supervise the strategic review.

 

M&A and your company

PSA-TEC sessions look at measuring a company's growth and prospects for exiting this year
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05/23/2012

WESTMINSTER, Colo.—Thinking about selling your systems integration company this year? What kind of price can you expect for your business?

Tri-Ed/Northern acquired by private equity firm

Audax Group acquires, Comunale says goal is to build a 'billion dollar business in 3 to 5 years'
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04/04/2012

BOSTON—Audax Group, a $5 billion private equity firm based here, announced April 4 that it has acquired Tri-Ed/Northern Video.

Interface Security Systems buys Westec Intelligent Surveillance

Combined company is major independent managed service provider
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03/29/2012

LAS VEGAS—Interface Security Systems a St. Louis-based integrator, acquired Westec Intelligent Surveillance, Jeffrey Frye, Interface VP sales and marketing told Security Systems News on March 28.

Kessler on the Stanley/Niscayah numbers

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06/30/2011

NEW YORK—Stanley Black & Decker definitely upped the ante with its bid, announced this week, for Niscayah. It’s a bid that’s been called generous by some, but is Stanley offering a premium price?

Stanley makes $1.2 billion cash bid for Niscayah

Securitas/Niscayah reunion not looking so imminent
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06/27/2011

NEW BRITAIN, Conn.—Stanley Black & Decker, parent company of Stanley CSS, announced today that it made a $1.2 billion all-cash bid for commercial security integrator and monitoring company Niscayah. The bid is supported by the Niscayah board of directors, which announced today that it unanimously recommends that shareholders accept the public offer.

Is a Securitas/Niscayah reunion imminent?

Mack says reunited companies better positioned to compete with the likes of G4S
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05/19/2011

STOCKHOLM, Sweden—Is it strange that guarding giant Securitas, which divested itself of its systems integration business (Securitas Systems, now Niscayah) five years ago, this week made a bid to buy that very same business back?

Diebold woos Henry Bros., but deal with Kratos expected to close Dec. 9.

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11/18/2010

FAIR LAWN, N.J.—The price that Kratos Defense and Security Solutions will pay for Henry Bros. Electronics went up this week, from $7 per share to $8.20 per share, as the result of a rival offer from Diebold.
Henry Bros. and Kratos on Oct. 6 announced a $45 million merger agreement.

Kratos agrees to buy Henry Brothers for $45m

Combined entity will create $125 million systems integration powerhouse
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10/07/2010

FAIRLAWN, N.J.—The agreement, announced Oct. 6, that Kratos Defense Security Systems would acquire Henry Brothers Electronics for $45 million started with a tap on the shoulder at ISC West.

Tyco acquires Broadview/Brink's for $2B

What was the multiple paid? Discussions continue
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01/19/2010

SCHAFFHAUSEN, Switzerland, and IRVING, Texas--ADT's parent company, Tyco International, announced this week that it will acquire Broadview Security, formerly Brink's Home Security, for $2 billion. The exact multiple paid for the transaction appears to be in the mid 40s, though discussions continue on that topic.

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