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Brinks Home Security acquires Select Security

Brinks Home Security acquires Select Security A look inside a deal that gives Brinks nearly 40,000 accounts and $2 million in RMR

Brinks Home Security acquires Select Security

DALLAS—With the acquisition of Select Security, Brinks Home Security adds approximately 30,000 residential and small business and 8,000 large commercial alarm monitoring contracts as well as $2 million in recurring monthly revenue (RMR).

The company will take ownership of the alarm monitoring contracts through an earn-out structure that includes a $10 million upfront payment and a 50-month earn-out period. Per the terms of the transaction, the seller will transfer title to all accounts to a special purpose vehicle (SPV). Title to the accounts will be transferred from the SPV to Brinks Home Security periodically during the earn-out period, with title to all accounts transferred by month 50.

“it is an acquisition that is just structured as an asset purchase of accounts, which is frequently the case in alarm transactions,” noted John Mack, Executive Vice President, Co-Head of Investment Banking, Imperial Capital, which served as the exclusive financial advisor to Brinks Home Security in the transaction. “Brinks has created a structure here that is a creative way to buy the business with payment over time, assuming the account base performs well can maximize proceeds for the seller that might not be available to them if they just paid outright for cash.”

Brinks Home Security CEO William Niles noted in the announcement that Brinks is “excited about the value this transaction creates and its alignment with our core objective of ‘creating profitable accounts at scale and holding for life,’ while also opening the door for similar opportunities in the future.”

Mack pointed out that this is deal is also an entrance for Brinks into the commercial market, noting, “While I don’t think they have designs on making that a significant part of their business soon, they are certainly interested in exploring that business and building something there.”

Niles noted that Brinks is excited to “expand our footprint into the large commercial security segment and to bring Brinks Home Security’s high-touch customer service to the entire Select Security customer base.” 

In addition to the accounts, Brinks Home Security is retaining the majority of Select Security’s commercial sales, field technicians and customer service employees, as well as certain office locations to offer the highest level of service to these customers. For 90 days following close, the seller will provide certain transition services to Brinks Home Security, and following the transition period, Brinks Home Security will manage all aspects of the customer experience.

“They hired a significant number of people from the company, and Select has a well-seasoned group of managers and people involved at Select that I think will be good for Brinks because Brinks is getting into servicing more of its customers,” said Mack. “By picking up a strong management team, technicians, customer service personnel, etc., they are adding a lot of bench strength to their abilities to manage their customer base directly.”

Niles said Brinks is thrilled to welcome the Select Security team to the Brinks Home Security family. “I look forward to integrating them into our customer-centric culture that serves as the guiding force behind all key decisions in our organization.”


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