American Alarm bolts on

Acquisition has been the name of the game for American Alarm security systems for some time now—and the Arlington, Mass.-based company announced its latest buy this week: Alert Security Systems of Leicester, Mass., a bolt-on in its Worcester branch's backyard.

Company president Wells Sampson told me that in the past 18 years, American Alarm has made 17 acquisitions. He said many of them have been in the past decade and “especially in the last five years, we've put a big push on to accelerate that effort.”

The acquisition of Alert Security, located in a suburb of Worcester, Mass., expands American Alarm's presence in the middle of the state, Sampson said.

“We built our Worcester office originally through a couple of acquisitions and so now we're trying to strengthen that Worcester, central Massachusetts operation,” Sampson said in an interview March 9, when the company announced the acquisition.

Alert Security, founded in 1984 by Edward Nelson, was small compared to American Alarm. It provided security systems installation, service and monitoring for more than 100 homes and businesses in Worcester County.

By contrast, American Alarm, which turns 40 this year, is a large independent security systems integration firm, with 140 employees serving about 15,000 residential, commercial and public sector customers in New England. About 60 percent of its business is resi, and it has four branches—three in Massachusetts and one in New Hampshire—and its own UL-listed certified central station in Arlington, Mass.

But Sampson said the purchase was a “win-win-win” for American Alarm, Alert Security and its customers.

He said that for American Alarm, it “increases our customer base in the Worcester market. The more customers we have in a geographic area the more efficient we can be serving customers. We're already staffed there so we can provide a pretty high service level to those customers and it helps us with our growth plan, growing customers and growing service capabilities.”

Sampson said Nelson was the sole employee of Alert Security, and he benefited too. “He needs to redirect some of this attention to family matters and other professional endeavors and so it sort of frees him up to do that,” Sampson said. Nelson will assist American Alarm as needed, Sampson said.

And the buy is a win for Alert Security's customers, virtually all of them residential, Sampson said. “We can provide more depth in terms of the numbers of technicians, service and support than a smaller company can provide,” he said. American Alarm can also offer the customers new technologies, different payment options, redundant communications options and video, Sampson said. “It's more choice, more options, more capabilities,” he said.

Also, he said, American Alarm can offer in-house monitoring to customers—Alert Security had sourced out its monitoring.

“A key point now is that the installation and service and monitoring can be all under one roof, which can give better, seamless customer service,' Sampson said.

He said that the customers acquired are valuable ones because Nelson, the former owner, ran such a good company. “They're happy, long-term satisfied customers,” Sampson said.

He declined to be specific about terms of the acquisition but said, “Obviously, that kind of customer base commands a premium set of terms.”

Are there more acquisitions planned for 2011? Stay tuned.

“We've always got more in the pipeline,” Sampson said. “We're a New England-based regional company and we're looking to expand both in our core branch office territories—that's the top priority to fold in high quality, good-customer-service type of companies in our existing footprint—and then the next priority is to expand the footprint to additional new England metropolitan city areas.”