GHS Interactive Security LLC, Sacramento, Calif., acquired LifeLine Security and Automation Inc., Sacramento, Calif., at the end of May 2013 for an undisclosed amount. GHS was formed by Steve Baker specifically for the purpose of acquiring LifeLine. An industry veteran, Baker has had executive roles at a number of companies, including Monitronics, ADT and Westec.
LifeLine, a former Monitronics dealer, was founded in 2005 by Gordon Johnson and John Fox. The residential market security company uses a year-round, door-to-door sales business model operated by a full-time sales staff. Its two current offices in northern California, along with a GHS Dallas office set to open up in the next month or two and a Las Vegas office scheduled to open in August, according to Baker, will poise the company for growth and expansion into other markets.
“This really was a good fit because LifeLine has been able to grow successfully over the past several years focusing on production,” Baker told SDM. “In the dealer world, it can be hard to find those focused on quality and LifeLine has had single-digit attrition in its Monitronics’ days. They bring a high-quality sales engine with all the right metrics and we bring a management team and equity to grow this business and expand into other markets,” Baker said.
As part of the deal, LifeLine will be rebranded as GHS, noted John Bergher, vice president of marketing and customer care at GHS. In addition, LifeLine’s 50-plus employees will remain with GHS. Baker is president and Johnson and Fox will stay on to head up the company’s sales efforts. Also part of the executive team are Craig Weingartner, CFO and Bergher. Each of the named executives are investors in the company.
To go through with the transaction, GHS was formed with the help of an undisclosed amount of equity capital from Topspin Partners LBO, along with a $20 million loan facility from Barclays Private Credit Partners Fund L.P. Topspin, based in Roslyn Heights, N.Y., is a private equity firm founded by Leo Guthart, former Honeywell Security and Fire Solutions Group executive. Steve Lebowitz was the Topspin partner that led the investment in GHS.
“The team at both GHS and LifeLine are great,” Lebowitz said. “We really liked the idea of investing in a company, which had done a great job of originating a lot of RMR at a low cost. These are all high-integrity people and we felt the GHS team would be able to fill in the operating structure and give the sales engine of LifeLine the support it needed to continue to grow.”
Part of GHS’s plan moving forward is to utilize LifeLine’s sales and installation capabilities while retaining all new accounts (rather than selling them). According to a press release from GHS, “Growth in customer account originations will come from a combination of expansion in existing markets and transplanting the highly systematized and scalable sales model into adjacent geographic markets.”
Barnes Associates Inc. was the consulting firm which advised Baker and Topspin on the transaction. Mitchell Silberberg & Knupp represented GHS in the transaction, both in the acquisition and financing. MSK’s team was headed by Tony Adler, Lessing Gold, Al Pepper and Daria Boxer.
“Steve Baker has been in the industry a long time and he’s very knowledgeable. GHS will be an excellent vehicle to really grow this into a significant company,” Gold said, adding that beyond assets and customer accounts, the most important part of this acquisition are the individuals involved on all sides. “The principals acquired really have the capacity to grow this business, and with the financial backing and their expertise, this security venture really is a great marriage.”
