In an industry that is known for larger companies purchasing smaller ones after
they've hit a decent RMR number, it comes to no surprise that another security
company transaction has occurred. Yesterday, Monitronics International
(Monitronics) announced that along with its parent company, Ascent Capital
Group, Inc. it will be purchasing Security Networks.
Both Monitronics and Security Networks work on a dealer platform. This
business model means that across the nation each company has several smaller
companies called dealers who work daily to find security alarm customers. The
dealer is then responsible for installing the security system, getting the contracts
signed, collecting initial payments, and setting up the customers account. After
the installation the clients contract is sent to the central processing station and
both the dealer and the monitoring company work together to ensure the local
customer is happy, the customers system is working properly at all times, and
any issues are resolved in a timely manner.
The acquisition of the Security Networks brings the Monitronics dealer network
to over 600 dealers nationwide. This is a smart move for Monitronics. The future
of security alarm companies is ever changing. Currently, Teleco and Cable are
becoming new players in the security alarm industry, changing how security is
sold to the consumer. For the most part, customer acquisition has relied on
smaller independent firms, dealer programs, and ADT. Now that new players such
as Comcast and AT&T have decided to jump into home alarm systems, its
imperative for a dealer supported company like Monitronics to strengthen its
customer base, and a purchase like this will do just that.