Security systems company Intelligent Monitoring Group (ASX: IMB) has struck a deal to acquire a new security business through its recently acquired subsidiary ADT Security Limited New Zealand. The deal involves the purchase of approximately 3,100 security customers from Electra Services Limited, which trades under the name Securely. Securely provides medical, home, and business alarms, complemented by a 24/7 monitoring system.
As per IMB, this acquisition immediately accretes to earnings and aligns with its capital deployment strategy, focusing on a 3x forecast cash profit multiple. In FY23, its revenue stood at $32.8 million against a loss of $11.8 million. Since then, its eyes have been set on acquisitions and funding to return to profitability.
Managing Director, Dennison Hambling, commented, “IMG is a highly focused and driven business, with a strong executive and operational team who collectively have a firm handle on becoming Australasia’s pre-eminent security and monitoring partner for individuals, businesses, and government. Whilst the industry has increasing tailwinds, we are focused on lifting our service levels and providing value for all our customers, be they dealer or direct, in order to grow and broaden the Security offering to levels that equal and surpass what customers in other countries would experience and expect today.”
Intelligent Monitoring Group provides monitored security, fire and IOT solutions that ensure the safety and protection of over 180,000 Australasian businesses, homes, and individuals. From security cameras to alarms and more, the Company has multiple brands within its umbrella, including Mammoth Security and SafeHaven, that offer security tech.
The acquisition of Securely’s customer base coincides with Electra’s strategic decision to divest its security operations in New Zealand and refocus on its core business. This move was endorsed by local ADT NZ management, which now operates independently as a standalone entity. The team, led by Alison Kingdon, is dedicated to re-establishing ADT as New Zealand’s premier security provider.
On June 13, 2023, Intelligent Monitoring Group finalised the acquisition of the ADT business in Australia and New Zealand. The transaction was partially funded through an $80 million debt facility with a three-year term.
Since acquiring ADT, Intelligent Monitoring Group has enjoyed eight weeks of ownership, during which it exceeded its projected earnings in the initial month of its expanded operations.
The acquisition of Securely’s customer base was achieved at approximately $271.81 per customer, setting a new record low for acquisition prices in this sector. This positions it as a value-enhancing acquisition for Intelligent Monitoring Group, particularly as these customers transition to ADT’s Onehunga control room by the end of December 2023.
In August, Intelligent Monitoring Group, with ADT, exceeded its budgetary targets, with the IMS business (pre-ADT) outperforming expectations as well. As a result, the Company’s management team is confident in achieving the targeted $31 million EBITDA, considering 11 months of ADT ownership and the newly acquired roster of Securely customers.
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