IASG adds 9,600 alarm contracts
ALBANY, N.Y.--On Oct. 2, Integrated Alarm Services Group announced the acquisition of 9,600 alarm contracts based in Minnesota. IASG bought the contracts, which generate approximately $235,000 in monthly revenues, for approximately $7.8 million, representing a multiple of 33, from a subsidiary of CenterPoint Energy. IASG has been monitoring and servicing these contracts in South St. Paul since 1998 and plans to continue operations there.
In purchasing the contracts, Joe Reinhart, investor relations representative, said IASG wasn't trying to send any signals to the market by making this purchase. The alarm contracts "had very favorable characteristics related to geographical concentration," Reinhart said. "We had familiarity with the company and with the customer base. The integration is far easier because we also had familiarity with the portfolio ... we've performed central station monitoring for this particular company for eight or nine years."
This lines up with comments IASG president and chief executive officer Charles May gave to Security Systems News in August concerning recent business dealings. During the interview, May explained, "As the company restructures, we are going through our entire account base state by state, city by city and determining where we really have good service presence, where we can promptly service customers and where we are just in the wrong location."
Earlier this year, IASG sold off a portion of its assets to Mountain Acquisition Company for $7.3 million, casting off accounts in Colorado, Idaho and Utah, "service areas which do not fit in our desired profile," said May. The indication is that the new alarm accounts in MN are part of IASG's plan to use money gained in such sales to purchase a similar base of accounts in locations that fit into their revised footprint.
For comments from David Prudhomme, director of marketing for CenterPoint Energy Home Service Supplies, see November's Security Systems News.