ENGLEWOOD, Colo. — Ascent Media Corp., a provider of creative and network services to the media and entertainment industries, announced today it has acquired Monitronics Int’l Inc. for approximately $1.2 billion.
The deal includes the assumption of Monitronics’ existing structured financing. The cash portion of the transaction comprised $413 million, plus $105 million in borrowings under a new $175 million credit facility, according to the company.
Ascent first confirmed it was in talks with private equity firm Abry Partners LLC, Monitronics’ controlling shareholder, about a potential deal on Dec. 6.
“This is a very good example of the smart investment capital that is available and anxious to invest in our industry,” said Peter Giacalone, who is SSI’s “Monitoring Matters” columnist and president of Giacalone Associates LLC, an independent security consulting firm. “The security industry is a very attractive investment for many new players who desire entry to the recurring revenue monitoring business.”
Dallas-based Monitronics Int’l provides monitored business and home security system services to more than 665,000 clients through its network of nationwide, independent authorized dealers.
Monitronics’ revenue totaled $272 million and EBITDA of $187 million in its fiscal year ending June 30, amounting to increases of 16 percent and 22 percent respectively compared to the same period in 2009, according to the company.
In a statement, Ascent CEO William Fitzgerald said the transaction addresses the company’s stated objective of acquiring a company with proven management and “a subscription-based business that delivers solid, predictable revenue and cash flow.”
Monitronics President and CEO Mike Haislip said the transaction with Ascent provides Monitronics a platform to further strengthen its leadership position in the $29 billion security market.
“Our unique business model that starts with our dealer network, allows us to build our subscriber base and scale the business, generating margins that can’t easily be matched by others in the industry,” Haislip said. “We look forward to working with Ascent on our growth plans and believe it will result in strong value creation for customers, shareholders and other stakeholders.”