Glenn Barham recently retired as the president and owner of Alarm Monitoring Service of Atlanta (AMSA) after selling his company to Alarm Capital Alliance. Barham has more than three decades under his belt in the electronic security industry. Like many owners who decide to sell, he was concerned about the future of his company, employees and customers.
While the sale of AMSA was a success, not all owners have the same positive experience, in part because they are not prepared for the sale. Barham’s experience with Alarm Capital Alliance provides great lessons for owners considering the sale of some or all of their accounts, including how he decided the time was right to sell and the steps he took to prepare his business for sale, as well as his experience in the due diligence process.
Here’s his first-hand account of the building and selling process:
I started thinking seriously about retiring and selling my company, Alarm Monitoring Service of Atlanta (AMSA), in early 2012, but I didn’t have any plans to act right away. Our company was successful, as we had recently hit the 10,000-account mark. We had signed a new four-year lease on our new building six months earlier; still, I knew that I wanted to sell at some point. I had 36 years in the electronic security industry and had spent the last 17 years — since 1995 — owning, operating and growing AMSA. I was ready for a break — I have teenage boys and wanted to spend more time with them.
I envisioned selling as something that would happen at some point over the next few years and I started to think about what I wanted and needed from the sale. Because I had been thinking strategically about the eventual sale of AMSA, I was able to act quickly when the time and opportunity were right. Changes in the tax code that were about to go into effect at the beginning of 2013 made it advantageous for me to sell before the end of 2012, and the right buyer came along.
Lesson: Find the Right Buyer
Whether you are selling some of your accounts, or want to make a complete exit and sell your whole company, finding the right buyer is the key to making the acquisition process successful. The right buyer is different for every seller — it means more than simply finding someone willing to pay you the most for your accounts. There are many buyers and dozens of well-funded companies who would like to buy your base, and it is your job to find the right match. I experienced a lot of interest in my company, but I wasn’t really excited about the process or comfortable with the potential buyers until I found the one that understood and responded to my two main concerns: my customers and employees.
I founded AMSA because I believed that there was an opportunity to offer customers excellent service at a lower cost — I built the company on the premise that we always go the extra mile to keep a customer happy. Over 17 years, for thousands of our customers, I either sold them their system or dealt with them personally at some point in the process.
It was very important to me to sell to a buyer that would treat my customers the way that we always had, and that would maintain our culture of professionalism and excellent customer service. It was a huge sense of relief when I found a buyer that was committed to doing that.
I was equally concerned about my employees. In our industry, many purchasers only buy accounts, not whole companies. I grew AMSA from a small business with three employees (me, my secretary, and a technician) to a company with 20 dedicated and valuable employees —I didn’t want to sell the company at the expense of putting those 20 people out of work. Our business model is very successful, and our success and our reputation depend a great deal on the employees who are so committed to that success. It was very important to me that I sell to a company that not only wanted to buy my entire business and keep all of the employees in place, but that would also treat those employees fairly once I was gone.