Platinum’s founders consolidate ownership

Founders buy out investor
 - 
Thursday, August 4, 2011

AMERICAN FORK, Utah—The four main founders of Platinum Protection, one of the major Utah-based summer-model companies, now own 100 percent of the company after recently buying out an investor, according to CEO Andrew Kindfuller.

The founders’ complete control over Platinum, a five-year-old company based here, will ensure its continued growth, Kindfuller said.

“It’s very positive and they’re quite pleased,” he said of the development.

Platinum announced July 20 that the Jacobson family sold its ownership interest in Platinum to the company’s four remaining founders: Chance Allred, Jared Hallows, Keith Dyer and Jacob Pruitt. Last summer, the Jacobson family bought a 17-percent ownership stake in the company to help resolve a dispute with one of the six original founders.

Wendell Jacobson, formerly chairman of Platinum’s Board of Managers has stepped down from the board. In a statement, he praised the company’s executive management, and said the move will enable the Jacobsons to focus on their primary business, real estate investments.

Hallows is now chairman of the board, Kindfuller said.

“To be able to own and run your own company is beneficial,” he said. “They [the founders, who also are Platinum’s executive team] are 100 percent responsible for the company and also 100 percent beneficiaries of Platinum’s continued success.”

 “This has been something that was discussed for many years, but the timing had to be right,” he continued. “We’ve now had several years of successful business where we’ve increased our profitability and the founders were able to make this acquisition.”

He declined to discuss the specific terms of the purchase, but said, “It’s beneficial for the company, it’s beneficial for the founders and it’s been beneficial for the Jacobsons … to have this transaction go through.”

As an example of Platinum’s success, Kindfuller pointed to this summer sales season, during which he said sales representatives are securing many very committed customers with high credit ratings.

“We’re not ready to release the statistics for this summer as far as the specific number of customers we’ve acquired and the number of offices [established], but I can tell you that not only are we having a great summer but most importantly … the value of the customers we’re bringing on is higher than ever,” Kindfuller told SSN.

He said that the average FICO score for new customers in 2010 was 725. For this summer, he said, “I can tell you it’s higher than that.” Specifics will be released at the season’s end.

Platinum, which has customers in 43 states, announced earlier this year that it was “breaking the mold” by recruiting two-thirds of its sales reps from places outside the Utah Valley, where summer-model door-knocking companies traditionally have recruited many sales reps.

“Our geographic expansion continues to go very well and we think that there are smart, interested salespeople all over the country,” Kindfuller said.

This summer, he said, more customers are using electronic fund transfers for their accounts. About four years ago, 10 percent of Platinum’s customers used EFT and now 70 percent do, Kindfuller said.

“We’re very excited about that,” he said, “What that means is lower attrition.”

Kindfuller also credits Platinum’s success to “strong partnerships with key business partners,” such as Monitronics, UTC/GE and Alarm.com.

In addition, he said, “Another thing we’ve put a huge emphasis on this summer is selling clean.” Some companies might have “summer salespeople being pushy and aggressive and doing things that are questionable,” he said, “but that is not how Platinum works.”

 

Comments

It will be interesting to see what the real sales numbers are with such a vague answer from Kindfuller. Maybe to avoid giving contradictory information perhaps? Who knows. I've heard that their sales force has dwindled the past three years or so, so hopefully they figure something out and fast. The '17 percent ownership' hyperlink in this article indicates that the owners owed 12 million to the Jacobson's just a year ago. In yet another SSN article 2 months later (October), Platinum claimed a procurement of "significant" funding for Platinum from Boathouse Capital. Being able to pay off 10-12 million to Jacobsens, and pay off 'significant' amount to Boathouse, and pay off rep commissions at the end of this summer? Wow. Platinum must have had the best year in the history of the industry, because the math did't make sense to me either. But at least they are 'humble' and don't want to share real numbers just yet.