IASG sells accounts
ALBANY, N.Y.-- Integrated Alarm Services Group sold a portion of its assets to Mountain Acquisition Company for $7.3 million in a plan to shed accounts in Colorado, Idaho and Utah, "service areas which do not fit in our desired profile," said chief executive officer Charles May. The strategy is to turn around and use that money to purchase a similar base of accounts in locations that fit into IASG's revised footprint.
As the company restructures, "we are going through our entire account base state by state, and 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," May said.
The holding company for Criticom International sold alarm contracts this summer with recurring monthly revenue of $212,200 and other assets, which include inventory, vehicles and deposits of approximately $225,000.
According to the announcement, the purchase price for the alarm contract assets was $7.1 million, representing an RMR purchase multiple of 34.7. The buyer paid cash with a promissory note in the amount of $6.5 million with a 12 percent interest rate, as the acquisition company has until the end of year to pay IASG. Until the note is paid, monitoring and billing will remain with IASG.
Working toward reshaping the company's reach, May said IASG will announce in "several weeks, several acquisitions of account bases that we are purchasing. We have signed letters of intent, but we do not have signed contracts."
The plan for IASG will be "to reshuffle the base to get out stuff that is just not geographically desirable," he said.