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The Edmonds Group

PE ponders PERS

Edmonds: ‘capital providers’ join MAMA ranks
 - 
10/23/2013

ST. LOUIS—There will be more transactions in the typically quiet PERS space over the next six to 12 months, and maybe even sooner, according to Henry Edmonds, president of The Edmonds Group, an investment bank here, which specializes in recurring-revenue businesses.

Henry Edmonds presents on PERS valuations

 - 
Wednesday, October 9, 2013

As I encounter new theories and projections about PERS valuations, I continue to find a refreshing lack of uniformity among the experts. That’s not to say there aren’t areas of agreement. There are. Those watching the market often cite similar determinants of valuation, such as attrition rates, cash flow and the costs of creating new accounts. But experts seldom endow the same metrics with equal importance.     

For example, Barry Epstein, president of Dallas-based Vertex Capital, believes reducing attrition rates to be a critical component of increasing PERS valuations. Conversely, Mark Sandler, a principal with SPP Advisors, downplayed the importance of churn, saying instead that a company’s value hinges more on how efficiently they can redeploy their units.

Today I came across a presentation on PERS valuations delivered by Henry Edmonds, president of The Edmonds Group, at the Medical Alert Monitoring Association conference held last week in Orlando. Edmonds’ insights reflect another nuanced interpretation of the market. In the presentation, he boiled PERS valuations down to four key metrics: cash flow; churn (attrition rate); growth rate/new account volume; and creation cost.

Just as vital for maximizing value is the ability of dealers to compile solid data on these metrics, Edmonds noted in one of the slides.

Edmonds developed some pretty in-depth calculations that he believes dealers should be cognizant of. For instance, churn rate metrics should account for total lost RMR on a trailing 12-month or trailing six-month basis. That figure should then be divided by average outstanding RMR. With respect to the cash flow, Edmonds advises dealers to focus on adjusted EBITDA and steady state free cash flow.

Edmonds’ presentation also offered a trove of information about buyers. He noted that buyers will create finance models for target companies, develop key assumptions based on a target company’s past performance and determine a capital structure based on current market conditions.

Edmonds also provided the following aphorism: “Buyers never pay more than they think they have to.”

In the coming weeks I plan to speak with Henry Edmonds himself to get a more in-depth take on PERS valuations and the state of the market in general. Stay tuned.

Goldman, Beekman see value in NorthStar

The Utah summer-model company says those two new equity partners will enable it to grow faster
 - 
05/22/2013

OREM, Utah—The fact that Goldman Sachs and The Beekman Group are NorthStar Alarm Services’ new equity partners is a “vote of confidence” in that summer sales company, according to Henry Edmonds, president of The Edmonds Group, which facilitated the transaction.

Monitor America’s dealer carrot: A year of free monitoring

Company opening new central station with 100-dealer promotion
 - 
03/27/2013

MOONACHIE, N.J.—Monitor America, a new wholesale monitoring company specializing in advanced video services, is opening its facility here in April with an offer of one year of free monitoring for the first 100 dealers who sign up.

SW24 getting positive response to 'no long-term contracts'

New ad in metro New York generates spike in Internet traffic and calls, company says
 - 
01/23/2013

NEW YORK—SecureWatch 24’s promotion of residential monitoring with no long-term contracts has raised eyebrows in the alarm industry, but consumer response has exceeded the company’s expectations since an ad launch on Jan. 2, according to Executive Vice President Jay Stuck.

DTT Surveillance recapitalizes

Capital One provides $40m, BV Investment Partners is new owner
 - 
03/21/2012

BOSTON—BV Investment Partners, a private equity firm based here, is the new owner of DTT Surveillance, a provider of managed surveillance and business intelligence to the restaurant and hospitality industries, following a recapitalization announced March 15. The deal includes $40 million credit line from Capital One Bank.

AFS gets new credit facility

Wooster says funding will help more small alarm companies grow
 - 
09/29/2011

CORTE MADERA, Calif.—Alarm Financial Services plans to help more small- and medium-sized alarm companies finance growth with a new credit facility it closed with RBS Citizens Bank, AFS president Jim Wooster announced this week.