Monitronics Purchases 93K Pinnacle Security Accounts

OREM, Utah — As part of a strategic alliance, Monitronics has acquired roughly 93,000 subscriber accounts from summer sales model company Pinnacle Security for $131 million.

The deal represents $4.4 million of gross recurring monthly revenue (RMR) and boosts Monitronics’ total subscriber accounts by 13%, according to an Ascent Media Corp. press release. Additionally, Pinnacle has agreed to sell the monitoring company future accounts as part of the partnership.

“We are pleased to have completed this significant transaction that will serve to drive strong growth in revenue, adjusted EBITDA and RMR,” Monitronics CEO Mike Haislip says. “We can integrate these accounts with significant operating leverage, which will provide strong incremental cash flow. The quality of the acquired accounts and the high rate of interactive service penetration also make these an attractive addition to our portfolio.”

In addition to allowing both Pinnacle Security and Monitronics to grow their businesses, the alliance also helps Pinnacle to increase its operating flexibility and lower its debt load significantly, according to Jared Chappell, president and founder, Pinnacle.

“We have found incredible success generating industry leading volumes of high quality accounts — even in a challenging economy,” he says. “At a time when competitors are taking on additional risk and increasing their debt, this improved capital position represents the best direction for Pinnacle.”

The transaction is unique because there is no residual service obligation, no holdback and no account guarantees. Furthermore, the accounts are built into a 33x net multiple, according to a statement released by Pinnacle.

Monitronics used its existing revolving credit facility and issued $30 million of incremental Term B debt to fund the acquisition, according to a press release. It expects to refinance the revolver through a Senior Secured Term B offering.

If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Commercial Integrator + Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add to your bottom line.

A FREE subscription to the top resource for security and integration industry will prove to be invaluable.

Subscribe Today!

Get Our Newsletters