PERS Business Continues to Mature
How about that recent news regarding the sale of Connect America, a provider of personal emergency response systems (PERS), to Rockbridge Growth Equity? Considering the economic climate and the lack of consistent M&A activity in the PERS channel, this is a significant development.
In a company press release, Connect America President and CEO Ken Gross stated, “The PERS industry should be proud of this transaction — this is a great partner. They own Protect America, which is the largest do-it-yourself security company and now they own one of the largest do-it-yourself PERS companies.”
I agree with Ken. Setting aside the 800-pound gorilla in the space — Royal Phillips Electronics of the Netherlands’ rollup of two of the largest players, Lifeline (2006) and HealthWatch (2007) — the channel is fragmented. Most of us have watched the growth of Connect America as a pure play online retailer of PERS. While they are not by any means old timers in the business, they had the experience and focus and grew the company over a relatively short period of time.
Other large players include LifeAlert and American Medical Alarm Corp (AMAC). Even with AMAC as a publically traded entity, these companies seem to stay under the radar. Taking all these factors into consideration further illustrates how big of an accomplishment, and what a positive and meaningful event, this investment by Rockbridge Growth Equity represents.
Although the rollup of LifeLine and HealthWatch created a lot of buzz, those deals were different. Connect America was a true entrepreneurial-based start up and on a path to growth. It is meaningful when a sophisticated equity group makes an investment in a space such as this, which had very little track record of entrepreneurial deal-making or investment history. While the purchase price was not disclosed, it will be interesting how or if this deal effects future acquisitions in the PERS space.
The PERS players, both small and midsized, are on a constant quest for growth capital. Maybe the Connect America transaction will kick-start a consistent model for evaluating the value of PERS companies and their associated RMR.
What do you think? Please send me your comments.
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About the Author
Peter Giacalone
Peter Giacalone is President of Giacalone Associates, an independent security consulting firm.
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