HSM marks its first buy under new owners
JUPITER, Fla.--Now with much of its internal operations shored up, HSM moved into acquisition mode in early May buying 700 commercial customers in the Los Angeles area from ACS Security.
The deal marks the first purchase for HSM while under the ownership of GTCR Golder Rauner. It provides HSM with additional customers, mostly with burglar and fire alarm systems, in Southern California, an area were the company already has a presence.
"We have a terrific footprint, but we're underserved in the markets we serve," said Tim Whall, president and chief operating officer of HSM, which serves 175,000 customer locations. "To be able to drop accounts into them helps because it increases the density of the markets that we're in"
The switch from focusing internally to looking for acquisitions follows 10 months of work by HSM to separate operations from Honeywell, its former parent company. The company moved onto its own computer network, established a corporate headquarters and relocated 31 of its 45 locations.
For ACS Security, selling its commercial business to HSM enables it to now focus on growing its high-end residential business. Approximately 40 percent of the company's 5,000 Los Angeles area customers are celebrities, while many others are presidents of large corporations.
"It was difficult for us to focus both on commercial and residential," said Al Radi, president, chief executive officer and owner of the Bel Air, Calif.-based company.
Radi entertained offers from four different buyers before deciding to sell to HSM. The reason he chose HSM was because he worked with Jim Covert, the chairman and chief executive officer of HSM, in the past. In 2000, when Covert began to build Cambridge Protection Services, Covert bought a security company owned by Radi and named ACS.
"I knew they would take care of the clients," Radi said.
Within 30 days of bringing ACS Security's commercial business on board, HSM visited 150 of its top customers. The visits enable HSM to meet customers, but Whall said it also generated several sales leads.