World Wide acquires Rainbow Home Systems
GARDEN CITY, N.Y.—World Wide Security joined forces with a former competitor with the acquisition, announced Nov. 22, of Rainbow Home Systems of East Meadow, N.Y.
“It’s a really attractive tuck-in acquisition for us,” said Mark Simson, CFO of World Wide Security. “Their office was about five miles down the road from us.”
The buy includes the assets of Rainbow, 1,200 new, mostly residential accounts, and five employees. All of the accounts have been moved to World Wide’s central station.
Former president of Rainbow, Lenny Minervini, has joined World Wide and will focus on sales and operations. Three technicians and one finance/administration employee will also join the company.
“We also look to acquire key employees with acquisitions,” said Joe Ingegno, VP and owner of World Wide. World Wide does business in the tri-state area. It has 15,000 accounts, 60 percent of which are residential, and it does third-party monitoring, through its Vision Monitoring central station.
In business for 30 years, Rainbow had a well-developed specialty in home automation and home audio, services World Wide has always provided as well. About 10 percent of World Wide’s residential clients have some sort of home automation or home audio service in addition to security, Ingegno said.
Has the poor economy affected this end of the business? Ingegno said while fewer customers are asking for high-end audio/video services, there is more demand for home automation that incorporates energy management. And accounts that include some home automation/AV components are particularly good accounts, he added.
“The retention rate is higher because they buy the whole package from us,” he said. “It would be difficult to find another alarm company that can service the audio and video. Unless they’ve moved, or there’s been some unusual circumstance, I can’t think of one customer we’ve lost.”
World Wide secured a new $5 million line of credit with CapitalSource in March, with the intention of acquiring. Before buying Rainbow Capital, it bought books of accounts from three companies: Digital Surveillance and Security, True Value Alarms, and Alarm Security Inc. Expect World Wide to make more acquisitions in the future Simson said. “We’re in growth mode,” he said.