In an announcement that equals approximately $360 million in combined revenue (from 2006), Protection One Inc., Lawrence, Kan., and Integrated Alarm Services Group Inc. (IASG), Albany, N.Y., plan to merge.

“For over a year, we have worked on this transaction,” said Charles May, president and CEO of IASG. “We feel the synergies involved in the combination of the two companies is extremely compelling for our employees, our shareholders and our customers.”

Protection One provides security services to the residential and commercial markets, as well as wholesale monitoring and multi-family monitoring and services. According to Richard Ginsburg, president and CEO of Protection One, the company is the largest provider of monitored security to the multi-family industry, with a number one market share, consistent customer attrition rates below 10 percent and about $34.9 million in revenue for that business segment — which is one of its smaller business segments in terms of revenue.

Ginsburg said that Protection One, which reported revenues of more than $260 million for 2006, would not have considered a merger with IASG a year ago. When May took his position at IASG earlier in the year, he made some significant changes to the operations, Ginsburg said. “He has put a lot of things in place to dramatically improve the service time for a repair,” he said. “As we merge companies together and meld the customer bases, we plan on giving those customers even more TLC.”

IASG’s business touches the retail, wholesale monitoring (under the brand Criticom), and financial markets, (offering loans to dealers). In addition, May noted, IASG owns Protection Service Industries L.P. (PSI), a commercial integrator company with more than 15,000 contracts. “This part of our company has about $1 million in monthly revenue and is self-sustaining,” he added.

Together, Ginsburg said, the combined company should bring in about $26.8 million in RMR for 2006, and will continue to focus on growing this number. “I think you are going to see a very complimentary fit within our business,” May said. “IASG does not have a multi-family market, but all other businesses have synergies across the board.” These synergies, May said, led to IASG choosing Protection One as a merger partner over other offers that had been on the table.

“With our combined accounts, we have a very good overlap and density in the Northeast and Southwest. In addition, we cover almost all major markets in the United States,” Ginsburg said.

When merged, Ginsburg said, Protection One’s wholesale market footprint will be two times the size of its nearest competitor, though he did not mention who that competitor was.

The combined company will be headquartered in Lawrence, Kan., and will retain the Protection One Inc. name. The RMR mix of the merged entity will be approximately 77 percent retail, 13 percent wholesale and 10 percent multi-family according to Ginsburg. The company will have 73 branches and six monitoring centers across the country.

“I believe, and I know the board does, that this is the right decision for the companies, shareholders, employees and customers,” May said.

The merger has been approved by the boards of both companies, but is subject to regulatory approvals and is expected to close at the end of the second quarter of 2007, according to Ginsburg. According to both companies, the new Protection One aims to become one of the largest providers in all three of its focuses: security alarm monitoring services to residential, commercial and national accounts; wholesale alarm dealer services; and multi-family market services.

For more information on Protection One, visit www.protectionone.com. For more information on IASG, visit www.iasgus.com.