Seacoast Capital has sold its minority equity interest in Fire Protection Service Corp. (dba Mountain Alarm) back to the company. Seacoast first invested in Mountain Alarm in December 2012.
Mountain Alarm designs, installs, services, and monitors security and fire alarm systems for both residential and commercial customers. A third-generation, family-owned and managed company, Mountain Alarm operates in Arizona, Colorado, Idaho, Utah, and Montana, and is the 36th largest alarm company in the US (out of a total of over 10,000), and one of the largest in the region. The company was founded in 1952 and is headquartered in Ogden, UT (www.mountainalarm.com).
“Seacoast was the perfect partner for us,” said Rod Garner, CEO of Mountain Alarm. They were deeply engaged when we needed help and stood out of the way when we didn’t. What else could any company ask for from a minority investor?”
In 2012, Seacoast invested subordinated debt with warrants in Mountain Alarm through its third fund, Seacoast Capital Partners III LP, to assist with the replacement of the company’s senior lender who exited the industry. During the term of its investment, Seacoast also supported the company’s add-on acquisitions which included the buys of Rocky Mountain Alarm, Armed Alert, Kenco and United Systems.
Over the term of Seacoast’s investment, the company increased revenue 99%; EBITDA 95%; and employees 77%. Recurring Monthly Revenue (RMR), an industry growth metric, increased 141% during Seacoast’s tenure.
“Our investment in Mountain Alarm has been a perfect example of Seacoast’s focus on highly motivated and incented management teams with a significant runway for growth—both organic and via acquisition. The company grew substantially over the course of our investment so they were able to buy out Seacoast’s position entirely with senior debt—as a result, Rod and the rest of the Mountain Alarm team now are back to owning 100% of the business. Seacoast wishes Mountain Alarm the best as they enter a new growth stage,” said Jeff Holland, a Partner at Seacoast.
Seacoast Capital makes non-control subordinated debt and equity investments of $5 million to $30 million in lower middle market companies with revenue of at least $10 million and $2 million or more of EBITDA. Sectors of interest include specialty manufacturing; value-added distribution; health and wellness; logistics and infrastructure services; and commercial and consumer services. Seacoast Capital is currently investing its fourth fund, Seacoast Capital Partners IV LP, with $239 million of capital commitments. The firm was founded in 1994 and has offices in Boston and San Francisco (www.seacoastcapital.com).
© 2018 Private Equity Professional | January 11, 2018
