Monitronics, the country’s second largest home security monitoring service, has acquired Livewatch, a DIY home security company. According to the press release from Ascent Capital, the company bought LiveWatch Security for $67 million, and in return it got 32 thousand accounts and $900 thousand in recurring monthly revenue. That translates to over 74 times RMR.
Julie Jacobson has a great post over at CEPro breaking down this news, going into the specifics of why this deal was made. I highly suggest you read it.
For the TLDR crowd, much of the why is found in a quote by Ascent’s CEO Bill Fitzgerald:
"In an effort to continue expanding Monitronics' service offerings and distribution channels, we are pleased to announce the acquisition of LiveWatch Security, a significant player in the rapidly growing DIY home security space. This acquisition will allow Monitronics to diversify its service offerings with entry into the developing and complementary DIY home service category. In addition to bringing an additional 32,000 customer accounts to the Monitronics platform, it will also provide a very robust production engine that is expected to continue generating a high volume of new accounts and RMR."
The reality is, as I wrote here, this transition towards lower cost models in home security built on top of cellular monitoring, DIY install and cloud-centric backends has been happening for the last decade. The security companies that have made this transition are seeing significantly lower overall cost of consumer acquisition, which means their consumer-facing offerings can be more consumer friendly (shorter contracts, etc). The ultimate result is strong momentum in the marketplace.