CSG buys two in Texas

Deal brings in 4,000 customers, $120,000 RMR; CSG also has new $325m credit facility
Wednesday, October 29, 2014

TULSA, Okla.—Central Security Group has added nearly 4,000 customers and RMR of $120,000 with its recent acquisition of two security and home automation providers, Dallas-based Fort Knox Security Services and SW Security Services.

The purchases substantially increase CSG’s footprint in the Dallas, Houston, San Antonio and Austin markets.

About 90 percent of the acquired accounts are residential, according to Richard Ginsburg, CSG president and CEO.

A critical component of CSG’s strategy is to sell interactive services to those acquired accounts.

“We’re pretty bullish on that,” Ginsburg told Security Systems News. “Two-thirds of our customers buy interactive.”

“The consumer demand in home automation and security services makes this an ideal time to expand our customer base,” he said.

A dozen employees from the two acquired firms will join CSG, Ginsburg said.

“A lot of companies are just buying accounts and the employees are displaced (during a sale), but we are actually looking for employees because we are growing fast. We’re not just looking for customers,” he said.

At Fort Knox and SW, marketing was “very web-based,” Ginsburg said, “so those employees bring talent on that end to the business.”

That forward-thinking marketing strategy was one of the things that attracted Ginsburg to the two companies, he said.

“In addition, they’ve been doing what we’ve been doing. They’ve kind of pivoted from being just burglar alarm companies to being early adopters of interactive products. They’re connected,” he said.

“That’s just icing on the cake in Texas,” he added.

Formerly in charge of Protection 1 and leading CSG since July, Ginsburg said there have been many changes at the company and many more to come.

“We’re coming strong out of the gates. We’re an old company with a lot of stuff going on,” he said.

The company also completed arefinancing and expansion of its senior secured credit facilities in the amount of $325 million, including a $50 million revolver. Proceeds from the deal were used to refinance existing debt, pay a dividend to the company’s current equity holders, and for general corporate purposes. Credit Suisse and Deutsche Bank acted as lead arrangers and joint bookrunners.