The NACC assets to be acquired include a state-of-the-art electronic security alarm monitoring center located in <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Irvine, California. NACC currently generates approximately $800,000 in third-party alarm monitoring recurring monthly revenues (RMR) and owns a portfolio of alarm contracts, which generates approximately $430,000 in RMR.
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The majority of the third-party accounts that NACC monitors and the owned contracts are in California. IASG is also acquiring a portfolio of secured loans to alarm dealers totaling approximately $29 million as part of the NACC transaction.
In announcing the signing of the Asset Purchase Agreement, Timothy M. McGinn, Chairman and CEO of IASG said, “This is a major opportunity for our Company as it strengthens our ability to serve independent alarm dealers and brings further critical mass in a targeted key geographic market.
“The added scale from the NACC acquisition will afford IASG meaningful synergies and expense saving opportunities in managing our monitoring activities Company-wide.
“We expect to realize on-going savings of approximately $2.5 million (on an annualized basis) from such synergies over the course of the next three quarters. The acquired dealer loan portfolio is also a plus for west coast dealer relationships.”
The transaction, which is subject to a number of conditions, including governmental approval pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, is expected to close by November 15, 2004. Upon closing of the transaction, IASG will hold a conference call to discuss the details of the transaction and the Company’s strategic and integration plans for NACC.
The transaction will increase the number of subscribers monitored by IASG from approximately 525,000 subscribers to approximately 765,000 subscribers and the RMR attributable to owned contracts from approximately $4.4 million to approximately $4.8 million. Additionally, IASG’s total loan portfolio will grow from approximately $4.8 million to $33.5 million.
