VC cash fuels ApxAlarm's full-service play
PROVO, Utah--ApxAlarm tends to shun publicity, but it's attracted the attention of some major investors who believe that the company's unique business model is a winner.
Earlier this summer, the company sold 50 percent of its business to three private equity firms, Goldman Sachs and Jupiter Partners, both of New York, and Peterson Partners of Salt Lake City. Terms of the deal were not released. At the same time, ApxAlarm secured a $75 million credit facility from Goldman Sachs.
Several months ago, ApxAlarm completed a yearlong transition from a company that generates accounts and then sells them to larger alarm companies, to a full-service alarm company that creates and services its own accounts.
"We're using the capital to expand current operations into new markets and looking at some potential strategic acquisitions and new services," said Alex Dunn, vice president of business development for ApxAlarm. "From a technical standpoint, we feel like we're definitely on the innovative edge with two-way voice systems, and cell back-up services. We're looking at other technologies that will offer even more safety and functionality to our customers."
Rick Stratford, a partner with Peterson Partners who also serves on ApxAlarm's board of directors, said it has "perfected a sales and marketing channel for creating accounts."
Security is not a new investment area for Peterson Partners, which is also invested in Ackerman Alarms, a large regional player in Atlanta.
ApxAlarm has 62 offices in 37 states, Canada and Puerto Rico. Its business model features a compressed selling season. "We take college students and graduates [the company headquarters is located near Brigham Young University]... who work during the summer months between May and September, they go door to door selling contracts," Stratford said. All accounts are generated during that time period. The rest of the year is used for recruiting and training.
Stratford said ApxAlarm "doubles in size every year and this year we're doubling again." The company's growth is due to the return of employees. "More people are returning year after year who are experienced and trained, and we're in more locations."
From its founding in 1999 until 2004, ApxAlarm installed more than 94,000 home security systems. For the calendar year 2006, the company is on pace to add 90,000 to 100,000 new customers, and projects gross revenues of $90 million.