IPO for APX?

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01/13/2010
Do you think APX Alarm may be preparing for an IPO? It’s total speculation on my part, of course, but don't you think it might make sense for them? Why would they want to become public? I was talking to Sam about why any company would want to go public and he rattled off three reasons: —it can be easier to raise money, because you can sell shares of a company rather than borrowing or giving up equity in the company in exchange for money from venture capital. —For a profitable company, the transparency that comes along with going public can be a good thing because anyone can see how well they’re performing. That’ll encourage people to invest cause everyone likes a winner. —If you’re going to make an acquisition, it gives you a second form of currency to use to pay. Instead of paying in cash, you can pay in shares. You pay, but you don't really pay. We all know that APX has grown like crazy and APX CEO Todd Pederson told me in an interview (in the upper right hand corner of our home page, click on “more videos" to see the interview on ssnTVnews) that APX plans to offer services to the homeowner beyond home security, and he said they’ll likely expand into commercial security at some point as well. They don’t typically do acquisitions (other than a central they acquired from CMS/Pro One), and they do currently have a whopping $415M credit facility. Still, it takes some coin to add those 150,000 accounts annually, so it’s reasonable to think that they’ll need more cash for their growth plans. [caption id="attachment_2500" align="alignright" width="200" caption="Christopher Black is APX Alarm\'s new CFO"]Christopher Black is APX Alarm's new CFO[/caption] What do you think? If they do decide to go public, they now have someone onboard who knows about these kinds of things. As I mentioned in a blog yesterday, APX Alarm just hired a new CFO, Christopher Black. I got a chance to talk to him yesterday. It was only his second day on the job, so we talked about his previous jobs, rather than any plans he has for APX. (ie. there was no mention whatsoever of plans for issuing an IPO.) However, should APX decide to go IPO, it seems like Black might be handy to have around. He’s a finance guy who worked in corporate banking for 12 years where he told me he, “handled high-growth companies, providing acquisition financing and growth capital.” He then went to work for a customer, Wabash National, a company that had significant debt. He was part of the management team that helped recapitalize and turn that company around. Next, Black went to American Commercial Lines where he helped move the company out of bankruptcy and shepherd it thorough a “very well received initial public offering.”