Apx deal prompts new service business for CMS

Thursday, October 8, 2009

ST PAUL, Minn.—Apx Alarm’s acquisition this week of a central station from CMS, a wholly-owned subsidiary of Protection One, was a uniquely structured deal that will provide a test-bed for a new business offering by CMS—the outsourcing of IT backup and disaster recovery services for other central stations.

The Oct 6 Apx deal is unique in that it’s an acquisition, but not a sale. The deal did not involve the exchange of any money. Apx will take over operating control of the central station here, the building lease, and it will hire the former CMS employees. In addition, for the next 14 months or so, CMS will provide IT backup and disaster-recovery services as needed for Apx.

“The deal was very unique,” said Tony Wilson, CMS president. “We’re not aware of any deal [like this] in the industry. It made strategic sense for Apx to take monitoring in-house and we’re happy to be able to assist them with that.”

Roughly 90 percent of the accounts at this central belong to Apx, the rest will be transitioned to other CMS facilities. The facility here is one of four owned by CMS. Wilson said CMS has made significant investments in the infrastructure of those centrals in the past couple of years.

“We’re looking at IT back-up service and disaster recovery as a new service to other companies as well,” he said.

How soon might CMS offer this new service? “We have been approached by several different companies; we’re in the discussion phase.” Wilson said.

How does the loss of Apx’s significant account base affect CMS’s wholesale monitoring business? “We’ve got over 4,000 dealers, and minus Apx, over 700,000 subscribers. It’s going to be business as usual,” Wilson said. “We’re the largest in the industry and we want to be the best.”