Select Security was one of the fastest growing security integrators in the United States, serving both the residential and business security services and life-safety markets. Following a period of rapid expansion and acquisition, the company struggled to merge customers and accounts from disparate reporting systems and experienced increased attrition rates in certain underperforming markets. Financial restatements and data reconciliations resulted in decreases in reported recurring monthly revenue, created defaults under its loan agreements, and exacerbated liquidity pressures. The company was also facing conflict of interest issues with related parties and entities.
The company retained Getzler Henrich to serve as sole independent manager of the company to assist with strategic and operational direction, provide oversight to management, assist in the analysis of strategic alternatives and assist in negotiations with its senior lenders on terms of a forbearance agreement. After concluding that a potential refinancing or recapitalization of the company was not feasible, the company and senior lender agreed to explore a sale transaction.
GH oversaw the sale process and worked with the company’s investment banker to evaluate and negotiate terms of a potential deal that was in the best interests of the company, its employees and other constituencies. As a result of those efforts, the company sold substantially all of its assets to Brinks Home Security with a substantial upfront payment and a creative earn-out structure that benefitted both the buyer and the company. Title to the alarm monitoring contracts were transferred to a special purpose vehicle, with Brinks purchasing the accounts over a 50-month earn-out period. The transaction allowed for the highest potential recoveries to creditors. GH continues to serve as sole Independent Manager following the transaction, overseeing the transition services period with Brinks.