Listed company acquires South Australian security services business for $8m
Written on the 15 March 2018 by David Simmons
Threat Protect Australia Limited (TPA) (ASX: TPS) has acquired security services business Security Alarm Monitoring Service Pty Ltd (SAMS) for $8 million.
SAMS is a company which currently has 22,115 connections and 218 resellers, and is anticipated to contribute in excess of $5 million in revenue to TPA annually.
SAMS, based in Port Lincoln, South Australia, services residential and commercial clients predominantly in the state.
The acquisition will be fully funded by TPA's debt facility with First Samuel Limited and is expected to be immediately earnings per share accretive.
SAMS owns and operates a purpose-built monitoring centre, with a total capacity of 60,000 connections, and is accredited by Australian Security Industry Association Limited as "Grade A1".
For TPA, the acquisition will grow the listed company's national presence, adding in excess of $400,000 in recurring monthly revenue at current levels; growing TPA's total monitoring revenue base by approximately 65 per cent.
The company expects the acquisition to positively contribute to TPA's second half FY18 revenue and earnings.
TPA's managing director, Demetrios Pynes, says the acquisition is part of the group's national growth strategy.
"SAMS is a very well-run and systemised operation with a fantastic reputation for customer service," says Pynes.
"Operationally and culturally it is a great fit for Threat Protect."
"Expanding into South Australia further diversifies our connection base and our stable of resellers. It also provides us a much larger distribution channel for new product lines in the future."
TPA's acquisition is part of the group's strategy to grow nationally, tap into the $3.6 billion industry, and consolidate the highly fragmented sector which has around 6,500 businesses nationally.
The company has now completed 16 acquisitions since listing on the ASX in 2015, including eight monitoring acquisitions in FY18, and is in the process of conducting due diligence on several other companies currently.
Shares in TPA are up 9.09 per cent to $0.18 per share at 11.13am AEDT.
Business News Australia
Author: David Simmons