ADS continues acquisition pace

 - 
Monday, November 1, 2004

NASHVILLE, Tenn.- ADS Security continued to strengthen its presence and position in the Southeast through a pair of acquisitions this summer.

The company’s business focus is on second and third tier cities in the states of Kentucky, North Carolina, Georgia, Florida, Mississippi and Tennessee. It operates 13 security alarm companies within those territories and monitors more than 50,000 accounts.

“Our strategy, when we wrote the mission station, has been the same mission statement (we  use  now),” according to Mel Mahler, president and chief executive officer.

Its acquisition of AGD Security of Cleveland, Tenn., netted 15,000 accounts. ADS has closed this location and diverted work previously handled at the location to its branch office in Chattanooga, Tenn. It only retained one technician as a result of the transaction.

The smaller of the two deals involved Angel Security of Prattville, Ala., which resulted in 900 accounts. The office was retained and will report to ADS’ Fox Alarm unit in Birmingham, Ala. The staff was also kept including David Burns, who founded the company in 1997 and will remain in a sales position.

As is the case with all the deals the company completes, ADS Security paid cash and folded the acquired accounts into its central station, which is located in Nashville.

Ronnie Haynes, chief financial officer and executive vice president at the company, declined to disclose the financial terms of the two acquisitions.

Mahler is constantly looking for new deals, may they be fold ins or acquisitions of full companies. ADS Security has been in business for 14 years and has acquired at least one company a year- compared with simply buying accounts. Thus far, Mahler has not completed such a deal in 2004.

ADS Security is now in talks with a number of firms and looks to finalize its 14 complete company transactions before the end of the year. It has three people working full-time to find and close new deals.

Even so, acquisition candidates aren’t necessarily discovered through heavy research but often presented to the company through business associates.

Mahler explained the way the company operates is beneficial for such deals. Considering how closely it works with dealers, when “a good one wants to sell, it’s an automatic fold in,” he said.
Related story
ADS Security to upgrade software