The Alarm Security Group LLC Inc. (ASG) expressed its disappointment in a letter to the Special Committee of the Board of Directors of Integrated Alarm Services Group Inc. (IASG) concerning an apparent lack of interest in an offer to combine the two companies. According to a copy of ASG’s letter to IASG, an offer was made nearly two months ago where IASG shareholders would receive cash plus stock. ASG says that this could represent as much as 20 percent of the combined surviving entity, which should result in a premium to IASG shareholders of 25 percent or more.
”Our proposal would put a floor on the further erosion of IASG shareholder value while still giving IASG shareholders the opportunity to share in the upside of our implementing a different strategy for the combined company with an experienced management staff and infrastructure that has many years of proven track record,” ASG’s letter says. “We believe that this proposal both maximizes value and limits risk for IASG’s shareholders. As discussed, our biggest concern continues to be the value that is being lost as a result of the ongoing deterioration of IASG’s business.”
ASG says this was demonstrated during the first quarter when retail RMR decreased by $200,000 and wholesale RMR decreased by $100,000. Further, the ASG letter claims it has closed and integrated 26 acquisitions and that the company has a large customer base with low attrition rates and an operation center with economically feasible account replacement costs.
“ASG would like to begin our due diligence immediately in a process that provides a level playing field designed to maximize shareholder value. Once allowed to begin the transaction process, we can move quickly toward a definitive agreement and complete our diligence,” the letter goes on to say.
ASG claims to have the support of the firm’s financing partners and that they continue to sustain an interest in negotiating with IASG.