Brinks Home Security Acquires 114K Accounts From Protect America
The company will take ownership of the residential contracts at closing through an earnout structure that includes a $15 million upfront payment.
DALLAS — Monitronics Int’l, dba Brinks Home Security, announces the acquisition of approximately 114,000 residential alarm monitoring contracts from Protect America totaling approximately $4.6 million in recurring monthly revenue (RMR).
Under terms of the transaction, Brinks Home Security will take ownership of the alarm monitoring contracts at closing through an earnout structure that includes a $15 million upfront payment. For the first six months following the closing date, the company will pay a $5 monthly earnout payment per active account. For the remaining 44 months immediately following the initial earnout period, the company will pay Protect America a $25 monthly earnout payment per active account.
The company acquired the accounts lien free at closing and, after 50 months, will have no further earnout obligation to the seller.
“This transaction fits neatly into our philosophy of acquiring profitable accounts at scale and holding them for life,” says Brinks Home Security Interim CEO William Niles. “The company will only make monthly earnout payments on active accounts with no payment required for non-pay or non-active customers, thus largely eliminating any related attrition risk. Further, the economic interests of the Company and the seller are aligned as both the Company and seller stand to benefit from Brinks Home Security’s award winning and best in class customer service.”
Founded in 1992, Protect America is a pioneer of the DIY security alarm monitoring market. The company provides a comprehensive offering of home security, video, life safety and smart home products. The company’s existing customer base will continue to be served by the Protect America team over the short term enabling a seamless transition. “The innovative structure gives the Protect America team confidence in the ongoing support of our customers by the Brinks Home Security organization,” says Scott Fleming, CEO of Protect America.
Imperial Capital acted as exclusive financial advisor to Protect America in connection with the sale of the company’s assets to Brinks Home Security.
“This is a great outcome for all parties involved, as this unique transaction structure aligns both the seller’s and the buyer’s interest. Attrition risk is mitigated, and both parties stand to benefit from Brinks Home Security’s industry-leading customer service infrastructure,” says John Mack, executive vice president and co-head of investment banking at Imperial Capital.
The transaction is supported by a majority of the Brinks Home Security’s first lien lenders who now earn an additional $4.6 million of RMR, significantly enhancing their credit position, according to the announcement.
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