Super Regionals Acquire to Grow Services & RMR
Left to right: Ken and Elaine Hohs of Norshore Alarm with Bob Bonifas of Alarm Detection Systems at the acquisition closing of Norshore Alarm.
PHOTO COURTESY OF ALARM DETECTION SYSTEMS
At the close of 2011 fiscal year, SDM reported on an apparent decrease in merger and acquisition (M&A) activity for security dealers and integrators. At the time, however, several industry consultants predicted that the volume of small-to-medium acquisitions would increase significantly in 2012. The end of the second quarter has seen that prediction come true — in spades. Three dealers in the top half of the SDM 100 completed very strategic acquisitions recently, each following a different growth strategy but all presenting a revitalized M&A landscape.
AFA Protective Systems Inc., Syosset, N.Y., ranked No. 21 in the SDM 100, acquired the alarm business assets of Sera Security Inc., Southampton, Pa. Among the assets purchased are approximately 1,200 accounts representing $51,000 in recurring monthly revenue (RMR). That RMR consists primarily of commercial fire alarm monitoring, and maintenance and inspection services in the Philadelphia/southern New Jersey marketplace.
Robert Kleinman, chief executive officer of AFA, added that the type of accounts acquired (60/40 commercial/residential split) are consistent with the type of services traditionally provided by AFA. “This is a synergistic acquisition that we will be able to maximize by monitoring Sera’s accounts in-house at AFA’s own central station thereby eliminating previously existing third-party monitoring costs,” Kleinman said.
The acquisition enhances AFA’s presence in southern New Jersey as well as providing the company with a legitimate entry back into the Philadelphia market, Kleinman continued. “The Philadelphia market is one where AFA maintained its own office until the early 1980s and then sold it. We have tried servicing it through our Mount Laurel office but have had minimal success to date. The Sera acquisition re-establishes AFA’s presence in Philadelphia and comes with employees with decades of experience there in all facets of the business.”
Alarm Detection Systems Inc., Aurora, Ill., ranked No. 22 in the SDM 100, acquired Norshore Alarm Company Inc., a privately-owned residential and commercial security business located in Libertyville, Ill. This merger expanded the footprint of Alarm Detection Systems in northern Illinois and brought a whole spectrum of advanced services — such as mobile device controls for security systems, online services, managed access and remote viewing of video, among others — to its growing customer base.
According to Terence Olah, vice president and chief financial officer of Alarm Detections Systems, this acquisition brought the company more than 2,000 accounts and nearly $80,000 of RMR, all with customers well within its existing service area and a balanced residential/commercial base.
Norshore’s present location in Libertyville will remain open and six of Norshore’s employees joined Alarm Detection Systems. Olah added, “We are progressing very well with the transition. Ken Hohs [owner of Norshore] has personally been very active in introducing our team to many of his customers and business relationships. Meeting with the customers has continued to reinforce how well he ran his business.”
Doyle Security Systems Inc., Rochester, N.Y., ranked No. 44 in the SDM 100, acquired two residential and commercial security businesses in Albany, N.Y., where the company recently began operating. According to Doyle, the acquisition of JMS Alarms and LPE Security & Fire Alarm Systems reflects Doyle’s interest in expanding its current geographic base in Buffalo, Rochester, Syracuse and Erie, Pa. into the Capital District of New York state including Albany, Rensselaer, Saratoga, and Schenectady.
John Doyle, president and chief executive officer of Doyle Security, told SDM, “We’re very excited about opening a new office in Albany and getting together with these two other companies. Both are a great fit for us [as far as] customer base and each is very strong. Putting it all together is just a great starting point for our office there.”