Monitronics sold for US$1.2 billion
Ascent Media Corp. has acquired Monitronics International, Inc. for approximately US$1.2 billion. The cash portion of the merger consideration comprised an aggregate of $413 million and was funded by Ascent from cash on hand and $105 million in borrowings under a new $175 million credit facility.
Headquartered in Dallas, Tex., Monitronics provides monitored business and home security system services to more than 665,000 residential and commercial customers. Monitronics delivered revenue of $272 million and EBITDA of $187 million in its fiscal year ended June 30, 2010, increases of 16 per cent and 22 per cent respectively over 2009. In the 12 years from fiscal year ended June 30, 1998 to fiscal year ended June 30, 2010, Monitronics generated 22 per cent compounded annual growth of revenue.
Ascent’s Chief Executive Officer, William Fitzgerald said, “We are pleased to announce this transaction which addresses AMC’s stated objective of acquiring an operating company with proven management that exhibits an impressive track record of success; a subscription-based business that delivers solid, predictable revenue and cash flow; and a business capable of
sustaining growth in varying economic conditions. Monitronics, with its 16 consecutive years of revenue and EBITDA growth, meets all of these criteria. We look forward to the ongoing success of Monitronics under the continued stewardship of Mike Haislip, Mike Meyers and the entire Monitronics team and are confident that this transaction will provide attractive returns.”
Monitronics utilizes an exclusive nationwide dealer network to sell, install and service the security systems it monitors. Monitronics purchases monitoring contracts from dealers and provides subscribers with security alarm services including monitoring, customer service and technical support. Additionally, Monitronics outsources on-site technical support to its dealer network, further reducing expenses and driving recurring high margin revenue.
Monitronics recently was the recipient of the 2010 Frost & Sullivan Company of the Year award in the North American alarm monitoring residential security market.
Mike Haislip, President and CEO of Monitronics stated, “This is an opportunistic time to participate in the security monitoring industry and the transaction with Ascent provides Monitronics with a fantastic platform to further strengthen our leadership position in the $29 billion security market. Our unique business model that starts with our dealer network, allows us to build our subscriber base and scale the business, generating margins that can’t easily be matched by others in the industry. We look forward to working with Ascent on our growth plans and believe it will result in strong value creation for customers, shareholders and other stakeholders.”
Haislip added, “We would also like to thank ABRY for their ownership and support over the years. It was with their exceptional operational expertise and smart financial backing that we were able to build Monitronics into the company that it is today.”