Edmonds Group Arranges $30 Million Subprime Account Purchase Program
The Edmonds Group announced the initial closing under a $30 million program to purchase subprime security alarm accounts from a large national alarm company.
The Edmonds Group, a specialized investment bank focused on recurring revenue businesses with a particular emphasis on the security alarm industry, announced the initial closing under a $30 million program to purchase subprime security alarm accounts from a large national alarm company. The buyer, a large alternate asset investing firm, will buy accounts with low credit scores and accounts with no credit score available. The seller will enter into a long term agreement with the buyer to provide monitoring, billing and onsite service for the purchased customers. Neither party wished to be identified, according to The Edmonds Group.
“This transaction provides an opportunity for the seller to lower their average cost of customer origination by accepting customers they would otherwise have turned away, while avoiding the increase in their attrition rate they would experience by owning subprime customers,” said Henry Edmonds, president and founder of The Edmonds Group. “From the buyer’s perspective, by paying a price that that takes into account the expected higher attrition rate of subprime accounts, they expect to achieve an attractive return.”
Eric Pritchard of Kleinbard Bell & Brecker, LLP represented the buyer. Bryan Lawrence of Buchanan Ingersoll & Rooney PC represented the seller. The Edmonds Group has closed more than 40 transactions representing more than $3 billion in transaction value since its inception in 2004.