My Alarm Center secures $10m in additional funding

Company makes multiple acquisitions, complementing its strong organic growth
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Wednesday, October 26, 2016

NEWTOWN SQUARE, Pa.—My Alarm Center, a residential security and home automation provider, recently secured $10 million in additional funding, giving the company increased capabilities on the acquisition front and in its growth organically.

Led by Ironwood Capital and supported by Alcentra, Saratoga Investment Corporation, NXT Capital and OFS Capital, the $10 million is additional second-lien debt, an increase of the $50 million second-lien term loan to $60 million, with the proceeds going to repay a portion of the company’s first-lien debt and fund growth through branch offices and recent acquisition activity.

In addition to providing additional debt financing, the funding “gives us more dry powder to support our growth and it also gives us more flexibility,” Amy Kothari, president and CEO of My Alarm Center told Security Systems News.

Kothari says that this additional funding comes at a time when the acquisition market has opened up with many high-quality opportunities, “supplementing the phenomenal organic growth we are experiencing at our nine branch and satellite locations,” she explained. “In this industry you need to be able to respond quickly to these opportunities, so having the additional debt financing gives us the capability to respond quickly to the market as it shifts.”

My Alarm Center added, through multiple acquisitions in September, more than 7,000 new customers in its key markets and expects the momentum to continue through the end of the year. Kothari declined to provide details on the deals.

Kothari said that the idea is to have the flexibility to deploy capital in an efficient way.

“Does it make sense to put that into your sales and marketing effort in your branches or is there a little window to go out and scoop up a collection of accounts and create more density in your markets,” she explained. “Our model has evolved to one where we have these multi-channels for growth, either organically or through acquisition.”

Roger Roche, at Ironwood Capital, said in a prepared statement, “While companies adopt several different strategies in order to achieve successful market penetration, including new product development and acquisitions, only My Alarm Center has achieved 15 years of consecutive growth in all areas with consistently impressive metrics.”

These acquisitions and the success of its own organic growth engine brings My Alarm Center’s total customers to more than 180,000, generating more than $7.2 million in recurring monthly revenue.

Since 2011, My Alarm Center has successfully shifted its growth model from purely acquisition-based to a multi-channel engine, with the majority of new sales being generated organically and acquisitions being done strategically, according to the company. In 2011, less than two percent of new RMR was generated organically compared to 70 percent year-to-date.