Press Archive

VC's buy 50% stake in Provo alarm firm, offer $75 million in credit

July 10, 2006 Three venture capital companies have purchased a 50 percent interest in Provo-based ApxAlarm, a home security company, and one of the three firms has proffered a $75 million credit facility to help fund ApxAlarm.s future growth and investments. Goldman Sachs, Jupiter Partners LLC and Peterson Partners are the venture capital companies involved in the acquisition of ApxAlarm, which has emerged as one of the largest full-service residential alarm companies in the country, operating in 62 markets in 37 states as well as Canada and Puerto Rico. Founded in 1999, ApxAlarm has sold and installed more than 94,000 home security systems nationwide and is projecting more than 100,000 new customers for 2006. The company, which recently moved into new quarters at 5132 N. 300 W., employs a core, year-round staff of between 200 and 250 people. In summer months, when its door-to-door sales programs are in effect, staff can rise to as many as 1,800, according to Alex Dunn, vice president of business development. ApxAlarm's equipment is provided by Honeywell and its alarm monitoring services are furnished by Criticom International. These partnerships, according to Dunn, have been central to the firm's success. "Two features that are found in our systems and which are much more high-end are two-way voice and cellular backup," Dunn said. "That's really the standard part of most of the systems that we provide. We've taken some higher end features and provided them more for the mass market." Two-way voice enables dispatchers to automatically listen into a customer's home once an alarm has been tripped, and to communicate with clients if necessary. Cellular backup ensures the system transmits an alarm even after an intruder cuts the phone line. "The two-way voice is especially crucial," Dunn said, "because in many markets, including Utah, police will not respond to a monitoring company's report of an alarm going off until monitors receive a verified response." "With traditional systems, the monitoring station would hav to call them home and someone would have to pick up," Dunn said. "If no one picks up, they can't verify what's going on. Our system enables them to listen into the home without anybody having to do anything at the house. If an alarm goes off, the central station can listen into the home and talk to the customer and the customer can talk back. They can also hear if someone is there. Of course if someone's robbing your home they're not going to pick up the phone. If the phone isn't picked up, they can't verify anything. With our system they can listen into the home and here if someone's there and not responding. If someone does not respond and they can hear them there, that's a verified response and they call the police. Even if a burglar picks up the phone, they.d have to know the password, and if they don't the police are dispatched." ApxAlarm began business as a dealer for other alarm companies such as ADP and Monitronix. "That essentially meant we acquired customers for them, went out and sold and installed these systems for them and then got a commission for each customer we brought to them," Dunn said. "We've made the transition to being a full service alarm company. We keep our own customers now, and the deal with the venture capital companies allows us to have the financial backing in order to keep customers and build new channels to sell the home security systems and possibly make some strategic acquisitions of some other companies that might fit well with what we're doing."

Goldman Sachs and Jupiter Partners are based in New York City. Peterson Partners is a Salt Lake City Company. By Barbara Rattle The Enterprise.