KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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comment on uptick in merger and acquisitions in the alarm industry / do you need DIY license
August 27, 2018
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comment on uptick in merger and acquisitions in the alarm industry from August 21, 2018 article
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Ken
The trend for the last 10 years or so.
"If you can't beat them, buy them!!"
Ralph Aiello
ESS, LLC
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Ken
I agree with your analysis, but I think there is an additional factor that’s contributing to the uptick in mergers and acquisitions: The Internet of Things.
At this point in time, many alarm company owners are being faced with the option of either upgrading their businesses to incorporate new smart home technologies or, if they’d rather not upgrade, selling to a qualified buyer. Alarm business owners are taking a close look at their options, and weighing the return on investment for upgrading to include home automation, artificial intelligence, and smart features against the profits they could gain by selling. While there are advantages to upgrading, there are also benefits to selling and letting someone else do the leg work while you continue to profit.
This evolution of the industry and security technologies paired with the fact that many baby boomers are ready to retire and many consumers are looking for added security features has made now a busy time for buying and selling alarm businesses.
Need help deciding which option is right for your business? Wondering if now is a good time to buy or sell? Give me a call.
Rory Russell
Acquisition & Funding Services
(518) 366-5111
www.afssmartfunding.com
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Response
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Rory makes a good point. I wonder how many alarm company owners decided to sell when telephone dialers were introduced, and then digital communicators? It must have been some learning curve when foil changed to window contacts [especially to the foil manufacturers]. I hear from alarm company owners all the time raising their concerns about increasing attrition and competition from DYI systems and businesses selling the DIY products and services. Life just keeps getting more complicated.
The younger entrepreneurs of course see more opportunity, not challenges. But your frame of reference, your mental disposition, as well as your health, play a big part of a decision to stay put, build or sell.
Good news is that you don't have to endure the decision and process on your own. Rory and other alarm brokers [all listed on The Alarm Exchange] can help. Before you call them, better call me. Let's see if you're really ready and if you are, let's start the process right, right at the beginning, not in the middle. Be sure to go back and read the series of articles on Agreements you'll see when selling or buying, starting with the July 9, 2018 article through July 17, 2018. Read them here:https://www.kirschenbaumesq.com/page/alarm-articles
Be sure to rely on the Merger and Acquisition team at Kirschenbaum & Kirschenbaum. Contact me or Jennifer Kirschenbaum [Jen's number is 516 747 6700 x 302].
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do you need DIY license
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Ken
If I am an authorized dealer for a large company and am selling the paper, do I need a license in those states that require it? If it's sold with large company who is already licensed in those states? Thanks
name withheld
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Response
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You don't need an alarm license to sell DIY equipment that you are not installing or servicing. But you're also not making any money doing that. If you're entering into monitoring contracts with these DIY customers then you need an alarm license in lots of states and municipalities. You cannot use a central station's license and you cannot use another company's license just because you are assigning or selling the monitoring contracts to that other company.
If you are a salesman for that other company then you won't need your own license, because you are working for a licensed company. In some jurisdictions you will need to be registered, but that is something the licensed company should be taking care of for you.
Our Licensing Department can assist with those interested in licenses. Contact our License Coordinator Eileen Wagda at 516 747 6700 x 312.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com