ASG Enters Eastern Tennessee Market With Fleenor Security Buy
The deal nets super-regional ASG Security $210K in recurring revenue and 5,200 customers.
ASG Security acquired FPS Inc. (dba "Fleenor Security Systems") of Knoxville, Tenn. Terms of the deal were not released.
KNOXVILLE, Tenn. – ASG Security has completed a deal to acquire Fleenor Protective Systems (dba “Fleenor Security Systems“), based here, marking the super-regional’s first entrance into eastern Tennessee. Terms of the deal, which closed Feb. 12, were not released.
With the transaction Beltsville, Md.-based ASG acquired 5,200 customers, representing about $210,000 in recurring revenue. The client base is comprised of a 60%-40% mix of residential and small commercial accounts, respectively.
Fleenor’s well-established, long-tenured customer base was particularly attractive and proved to be a good fit for ASG’s growth strategy, ASG CEO Joe Nuccio told SSI. More than 50% of Fleenor’s customers have been with the company longer than five years.
“We continue to find these very well-run companies that have great customer service and very low attrition. This gives us a really good opportunity to move into eastern Tennessee, and it also gives us good access to service our existing customers that we have in Ashville, N.C.,” he said.
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Fleenor Security was started in 1983 by Mike Fleenor who has owned and operated the business ever since. With 50 employees, the company is a full-service provider of security and fire/life-safety systems. It also operates a UL-listed, CSAA Five Diamond-certified central station. (Note: Fleenor Security Systems of Johnson City, Tenn., which is owned and operated by Mike Fleenor’s brother, Norman, is a separate organization and was not part of the ASG Security acquisition.)
Fleenor’s current staff will be retained and continue to service the company’s customer base going forward. Nuccio, who is a member of SSI‘s editorial advisory board and an SSI Industry Hall of Fame inductee, said ASG will leverage its organic sales expertise to help grow its newest branch operation.
“What we are really excited about is we can bring in our marketing programs, our ability to really get into interactive services in great detail. They have a nice small commercial base that we can improvise on with our products and services. Collectively we are able to have a strong platform,” Nuccio said.
Because Fleenor has built such a strong reputation in the eastern Tennessee marketplace, Nuccio said the company will transition gradually to the ASG branding, beginning at some point in the future with a “Fleenor, an ASG Security company” moniker.
“We have done a lot of transactions in our history. This is one of the most efficient, quick transactions that we have accomplished,” Nuccio said. “It really worked. Mike was very organized. He was very efficient. It was a pleasant transaction.”
Fleenor told SSI he had never given much thought to selling his company. During the last 18 months, however, he said he was approached multiple times, including by private equity firms and other installing security contractors, to gauge his interest in a buyout. With two grown children who work outside the industry and no clear succession plan, Fleenor decided to seek the help of an M&A specialist from outside the industry in September 2014 to evaluate his options.
Initially, Fleenor elected to be acquired by a dealer firm that was slightly larger than his own business. However, those plans were derailed after Fleenor began having reservations about the company’s offer and its ability to expand the business. Fleenor’s M&A broker would then put him in contact with Nuccio through a mutual contact.
“That was the first time I had been introduced to Joe personally. He flew down and met with us on Dec. 23 and, as they say, the rest is history,” Fleenor said. “I felt like ASG was in a position – with their experience and their broad reach with branches and manpower and capital – to be able to come in and actually help our team go to the next level.” (You can read more from Fleenor in this blog.)
ASG recently announced it achieved a milestone of sorts after reaching $10 million in recurring monthly revenue (RMR) at the end of last year. It also posted roughly 15% growth from 2013 to 2014. There is much more growth to come, and the deal for Fleenor Security is just the beginning in 2015, Nuccio said.
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ASG has set its sights on entering three new markets this year; Fleenor Security represents the first of that acquisition strategy.
“I put together a budget for 2015. We are going to continue doing the same things that we’ve been doing and continue to expand our horizons,” Nuccio said. “This is a nice start for us in 2015.”
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About the Author
Rodney Bosch, Senior Editor
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.
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