Professional Documents
Culture Documents
Agenda
Market Overview
Components of Value
Focus on RMR
Buyers and Sellers
The Future
Q&A
Market Overview
Market Characteristics
Stable and Liquid
Across all sizes and geography
Residential and commercial oriented companies
Discriminating
Larger valuation spreads
Risk aversionon both sides
BUY SIDE
ADT Spin-Out valuation
Tension
Cost of pursuing a
transaction
Fear of a failed process
Integration concerns
Attrition fears
BUY SIDE
ADT Spin-Out valuation
Tension
Cost of pursuing a
transaction
Fear of a failed process
Integration concerns
Attrition fears
New Players
Probability
of Change
6
Tax Rates
Recession Periods
10
M&A
2011
RMR
Value
Multiple
RMR
Value
Multiple
11
$ 385
34x
$ 108
$4,726
44x
25
834
34x
28
948
34x
36
$1,219
34x
$ 136
$5,674
42x
Dealer Program
Total
2010
11
RMR
Value
Multiple
$ 163
37x
28
962
34x
33
$ 1,125
34x
Components of Value
12
Customer Base
Sales & Installation capability
Customer Base
Uncoupled Indicators
Dealer Program market34x RMR
Bulk account sale transactionsrarely at or above 40x
Recession/slow-growth periodslower valuations
Sale of pure Originator operations [ NEW ]
13
FOCUSEDand scalable
14
Example:
Size of Market
Square
Miles
Population
57
163,410
Originated
Number
Accounts
RMR
Cost
Multiple
2,524
$100,783
25x
15
Focus on RMR
16
System:
RMR:
Good Geography
Excellent Installation
Leased System
Accepts Rate Increases
Upgrades/Enhancements
17
System:
RMR:
X Bad Geography
X Poor Installation
History:
X Behind on Payment
X Status Unknown
18
19
Higher
Maintenance
Non-POTS
Communication
Monitoring
Interactive/Managed
Services
20
System Lease/
Subsidization
21
22
23
10
11
12
13
14
15
3%
10%
21%
41%
52%
60%
66%
71%
75%
78%
81%
83%
85%
87%
88%
1,000
(30)
970
3%
3%
970
(70)
900
7%
7%
900
(110)
790
12%
13%
790
(200)
590
25%
29%
590
(107)
483
18%
20%
483
(80)
403
17%
18%
403
(63)
340
16%
17%
340
(50)
289
15%
16%
289
(40)
249
14%
15%
249
(33)
217
13%
14%
217
(26)
190
12%
13%
190
(22)
169
11%
12%
169
(19)
150
11%
12%
150
(17)
133
11%
12%
133
(15)
118
11%
12%
24
26
The 3rdStrategic New Entrants just looking (for the time being)
Debt markets highly supportive
Industry in favor
27
The Future
28
Bellwether Issues/Indicators
ADT Spin-Out Valuation
Success of Telco/MSOs
Economy
Continued support of the debt markets
29
BARNESASSOCIATES
Michael Barnes
Mark Gronowski
Partner
Partner
mbarnes@barnesassociates.com
mgronowski@barnesassociates.com
30