What Does a Good Acquisition Look Like?
Selling your alarm accounts can be a daunting prospect. In addition to the emotional aspect of selling part (or all) of a business that you may have spent your life building, the uncertainty of what’s involved can make even the most ambitious business person a little leery. If you’ve never sold any of your alarm accounts before, you may not know what an acquisition actually looks like. Not only that, you’ve probably heard some horror stories associated with selling alarm account portfolios.
We’re committed to a process that is much simpler, more transparent and more efficient than other buyers.
What does that process look like?
Here’s the basic structure of a deal, according to Kelly Bond, ACA’s Senior Vice President of Sales and Marketing.
Most deals begin with an initial meeting between ACA and the seller, followed by a questionnaire we use to gather some important information about the parameters of the deal. Based on the information the seller provides in the questionnaire, ACA submits a letter of intent (LOI) to the seller, which details our offer for the purchase of the seller’s accounts, including the multiple of the recurring monthly revenue (RMR) offered.
Once the LOI is signed, the due diligence process begins.
ACA provides the seller our Due Diligence Checklist, which outlines all of the information we require to close the deal and then a timeline that explains milestones and how the transaction will progress. (Click here for an overview of ACA’s Due Diligence Checklist). At this stage of the process, we also provide the seller a copy of our Asset Purchase Agreement, to give the seller ample opportunity to review and to submit to a lawyer, if the seller so desires.
A key part of our due diligence is a site visit, during which our acquisition team visits the seller’s offices and reviews customer accounts and business records. Because our team is both professional and highly experienced, we conduct our site visit to the seller’s office efficiently and discretely in a way that minimizes disruption to the seller’s business and employees.
Once the due diligence has been completed, we are able to close the deal with the seller, typically within 30-45 days from start to finish. Post-closing includes transferring the accounts, which we accomplish in a way that ensures the seller’s customers aren’t disrupted, minimizing attrition and maximizing the dealer’s ability to receive the holdback. The holdback amount is a negotiated percentage or dollar amount of the sale price that is withheld at closing and is, typically, held for 12 months post-close. In addition, if the seller chooses, they can continue to provide service to those accounts that were sold, realizing the benefit of revenue from new equipment installs, upgrades and service performed, as well as referrals from those customers.
We know you’ve worked hard to build a unique and profitable alarm company. For that reason, ACA treats every account acquisition as a unique transaction. Our dealers have told us that they appreciate the way we respect the company they’ve built and, perhaps most importantly, that we recognize the true value of the accounts they’ve created.
We know you may not be considering selling your accounts at this time, but it would be our privilege to discuss your business and your future plans. Click here to request a short introductory phone conversation with one of our business advisors about Alarm Capital Alliance advisory services.