ADS buys Security Services

NASHVILLE, Tenn.—Forging ahead with its planned acquisition strategy, ADS Security has acquired Savannah, Ga.-based Security Services, its second fold-in this year.

The company, based here, also plans a larger purchase in a new market this fall and perhaps two more fold-ins too, ADS President and CEO, John Cerasuolo, told Security Systems News.

“It's been a really good year for us,” he said. “It's exciting.

The purchase of Security Services adds about 1,000 accounts to the approximately 3,000 accounts ADS already had in the Savannah area through its office there, he said. Cerasuolo said the new additions are “really strong accounts with really low attrition.”

At the end of 2012, ADS' RMR was just over $2 million—up 7.4 percent from 2011—and it had nearly $33.9 million in gross revenue, with nearly 69,000 customers and 263 employees. This spring, Patrick Ritter, company VP/controller, projected increases in all those numbers. He said ADS expects to have RMR of $2.2 million, $35 million in gross revenue, 72,000 customers, and 280 employees by the end of 2013.

Security Services' former owner and a technician will join ADS, Cerasuolo said.

In addition to its headquarters here, ADS has 15 branches and serves seven states in the Southeast: Tennessee, Kentucky, Alabama, Mississippi, Georgia, South Carolina and Florida.

Cerasuolo told SSN last year that ADS plans to add one new branch location each year, and said he expects to make an announcement about such a purchase this fall.

The company also has a strategy of also acquiring tuck-ins along the way.

Such an active acquisition effort is not easy, Cerasuolo said. The actual purchase of a company is only the tip of the iceberg—the buy actually results from years of work, he said.

 “For us, it's more than just going out and finding somebody that wants to sell and consummating a transaction, it's about building relationships with entrepreneurs in the Southeast who have companies, so that when they're ready to sell we're the one they sell to.”

Such was the case with Security Services, which had been in business since 1983.

Cerasuolo said he got to know Billy Rauers, who owned the company, which was about 50 percent residential.

“He's an entrepreneurial guy and he fits really well in our culture, which is something he and I kind of discovered early on when we first started to get to know each other a few years ago,” Cerasuolo said.

Rauers wanted to sell so he could take advantage of new technologies his small company couldn't expand into and also to do more of what he enjoys—selling—rather than day-to-day operations, Cerasuolo said. “He really liked the opportunity to partner up with us and take advantage of some of the things that come with being part of a big company,” Cerasuolo said.

He said Rauers now will be a senior sales consultant with ADS. Rauers' NICET III-certified technician will also join ADS. “He has a long history of doing fire systems which is a great thing to add to our team there in Savannah,” Cerasuolo said.

In May, ADS announced the purchase of another fold-in, Chattanooga, Tenn.-based CrimeWatch Security.

Cerasuolo recently shared some of his expertise regarding acquiring neighboring businesses with SSN for a Market Trends report.