LOUD Security to acquire three
KENNESAW, Ga.—LOUD Security Systems plans to acquire three companies by June, according to owner and president John Loud.
Acquisitions are key to the company’s growth plan, Loud said, and with a new senior revolving line of credit from Capital One Bank, LOUD can pursue those goals.
Previously, “the cost of money or availability of it was limited. Many times we had to forgo opportunities. But now we have significant financing available,” he told Security Systems News.
Capital One and Loud declined to specify the amount of the revolver, but John Robuck, managing director of Capital One Bank, characterized it as “solid, fairly typical for a company of LOUD’s size looking to expand.”
The companies to be acquired are in the Atlanta metropolitan area, where LOUD is based, in keeping with the company’s customer service goals. “We want to be able to properly service our customers,” and that means being close by, Loud said.
What kind of companies is Loud looking for?
“It has to be the right location, the right model and the right mixture of people,” he said. “We welcome the people and their accounts.”
The company has customers in 15 states. Outside of its main territory, LOUD will get the job done and remain the No. 1 service provider, but it usually will dispatch service to reputable providers in those areas, he said.
The company currently has RMR of just under $200,000 and 6,500 accounts, 60 percent of which are residential. It employs 60 and expects to have 70-75 on the payroll a year from now.
It has a residential security division that works with major builders on new home construction, a commercial division and a traditional residential division.
On the commercial side, LOUD recently was named the exclusive provider for LakePoint Sports in Emerson. LOUD will provide all of the complex’s surveillance camera systems, access control systems, security and fire protection equipment and monitoring. The complex plans to have 28 hotels, movie theaters, bowling alleys, bars and restaurants, Loud said, “and all the low-voltage systems will go through us.”
This is Capital One’s first time working with Loud. The relationship is a win-win for both parties, Robuck said.
“They have a very strong, existing base business, they’re leaders in the industry, their metrics are better than the industry average, they’re a top performer in the industry,” Robuck said. “They have a desire to grow through acquisitions and organically, and that fits nicely with us.”
In addition, he said, Capital One will assist Loud on due diligence in his acquisitions, which Loud agreed was a big help. “It’s a daunting task,” Loud said.
“From our perspective, there’s a lot of capital available to companies similar to John’s. Our debt facility allows companies to leverage some of their assets without sacrificing equity. That’s pretty important for most closely held companies. They can grow while retaining equity,” Robuck said.
Said Loud, “This revolving line of credit is an essential tool to take our growth … to the next level.”