Systems integrator becomes even greater

The Greater Alarm Co. gains scale, financial resources by joining Interface Security
Saturday, January 1, 2005

IRVINE, Calif. - The Greater Alarm Company, one of the most well-known systems integrators in California, has joined a growing regional security company, Interface Security Systems, in a transaction that brings geographic reach to both businesses.

The acquisition was structured with Interface Holdings, the parent company of Interface Security, buying a majority interest in Greater Alarm in November. The company’s two founders, brothers George and Jim DeMarco, retain a minority interest in the business that was started in 1981, and will remain onboard.

The financial terms of the deal were not released, but it is considered one of the largest purchases by Interface Holdings, which has completed 20 acquisitions of smaller security companies over the past several years. Today, the security business operates 14 branches.

Greater Alarm brings with it access to the California security market, with five locations throughout the state and $25.4 million in annual revenues, with a majority of its revenues coming from commercial installations. The company employs 153.

For Interface Security, the transaction is an important part of its future, as the company looks to expand into the West Coast.

Mike Shaw, chief executive officer of Earth City, Mo.-based Interface Security, said the two companies first began talking about one year ago.

“The first thing that came to both of our minds was, ‘was this a good fit’,” said Shaw. “Greater Alarm was just exactly what we were looking for. It had significant scale, good branch infrastructure throughout the state and a focus on high-end commercial and residential.”

Now, the combined businesses report $2.3 million in monthly recurring revenue and 70,000 customers, according to Shaw.

Greater Alarm began exploring financing opportunities a year ago, according to George DeMarco, president and chief operating officer of Greater Alarm. When the opportunity presented itself for Greater Alarm to become part of a larger company, DeMarco said it made sense.

“When we’re talking about opportunities out there, a lot of our customers are not just California based,” he said. “We have customers expanding beyond the borders of California and they’ve asked us to go with them.”

Though now an Interface Security company, Greater Alarm will continue to operate under its own name. The benefits of the transaction, said DeMarco, is an expanded geographic reach, access to additional capital and the ability to market to customers video verification from Interface Security’s central station.

But aside from that, both businesses offer similar services, such as fire, access control, surveillance and burglar alarm systems.

“We look at ourselves as one company,” said Shaw. “We literally now have a coast to coast footprint.”