SAFE Security Acquired by AAA Northern California, Nevada & Utah
Based in the San Francisco Bay Area, SAFE Security will continue to operate as an independent subsidiary of the motor club affiliate.
AAA Northern California, Nevada and Utah (AAA NCNU) has acquired SAFE Security of San Ramon, Calif., for undisclosed terms.
WALNUT CREEK, Calf. — The alarm monitoring and smart home sector has a new player following the acquisition of SAFE Security by AAA Northern California, Nevada and Utah (AAA NCNU) for undisclosed terms.
Based here, near San Francisco, AAA NCNU is an affiliate of the AAA motor club, a not-for-profit, fully tax-paying corporation. AAA, with over 1,100 offices in the United States and Canada, has more than 58 million members among 19 affiliates, according to its website.
AAA NCNU is the fourth largest affiliate, providing a wide assortment of automotive, travel, insurance, DMV and financial services to nearly six million members. Along with the areas that make up its geographic namesake, the affiliate also operates in Alaska, Arizona, Montana and Wyoming.
A spokesperson for AAA NCNU tells SSI that SAFE Security will continue to operate as an independent subsidiary of the motor club affiliate. Mike Hetke, who formerly served as executive vice president and chief innovation officer of AAA NCNU, has been appointed president and CEO of San Ramon, Calif-based SAFE Security.
John Mack, executive vice president and co-head of investment banking at Imperial Capital, served as the financial advisor to AAA NCNU in the transaction.
“AAA NCNU asked me to find a logical company for them to buy that fit their criteria. We showed them several different ideas, but when we score-carded each of the prospective acquisition opportunities, SAFE scored far and away the best,” Mack told SSI. “It is good for the security industry to see somebody with these kinds of skills coming into the sector. They obviously have a positive point of view about the opportunities in alarm and smart home services well into the future.”
SAFE Security was of particular interest to AAA NCNU given the close proximity of the company’s Bay Area headquarters in San Ramon, which is located near the motor club affiliate’s base in Walnut Creek.
Founded in 1988, SAFE Security was acquired in 2012 by ICV Partners (ICV), a private equity firm focused on lower middle market companies. Also under the SAFE corporate umbrella is the central station SAFE Monitoring Technologies, alarm company California Security Alarms, plus a dealer program that leverages Alarm.com wares and services. The company had long been led by its president, CEO and founder Paul Sargenti prior to his departure in April.
Among a handful of acquisitions over the years, SAFE Security purchased Safeguard Security of Scottsdale, Ariz., in 2014 from its founder and owner John Jennings, a member of the SSI Industry Hall of Fame. Although terms of the transaction were not disclosed, the deal represented approximately $1.5 million in recurring monthly revenue (RMR) and 25,000 customers.
Mack explained that AAA NCNU will likely look to grow strategically with subsequent acquisitions in the security sector and operate along the lines of a full-service company akin to ADT and other traditional providers. Read: don’t expect the motor club affiliate to market heavily discounted monitoring contracts.
“It is a very good thing to see AAA NCNU [in the security industry],” Mack said. “They do see a rationale for professional security in the space. That is a strong endorsement.”
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About the Author
Rodney Bosch, Senior Editor
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.
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