The most encouraging financial news that I have heard in months came from the Barnes Buchanan (financial) Conference in West Palm Beach, Fla. earlier this month. I arrived to a buzz of enthusiasm, to be told that attendance was the best ever. Mike Barnes, principal of Barnes Associates Inc., in St. Louis and Bryan Lawrence, an attorney with the Pittsburgh office of Buchanan Ingersoll & Rooney, in unison assured me that the banking community was there in force. Since 1986, Barnes' firm has been involved in more than 230 alarm company acquisitions and financings-- an aggregate transaction value in excess of $5 billion.

The Barnes Buchanan Conference is a boutique financial conference that draws a very dynamic group of bankers and brokers who provide funding to alarm companies and monitoring businesses. For the most part, these players keep a pretty low profile in the industry, albeit their dollars turn the wheels behind much of the day to day operations on the RMR (recurring monthly revenue) side of the security business. Also present were the CEO’s and presidents of well known, high-profile alarm sales and installation companies and alarm monitoring companies including Protection One, ADT, ASG and Monitronics, just to name a few, as well as an established regional alarm company opening their own central station for their customers and a residential alarm company with a unique product offering. They came to develop the funding needed to grow their businesses, to continue their work with the banking partners, and to keep up with what’s happening in the market. Barnes has been benchmarking the health, transactions and operating metrics of alarm monitoring since the 80s and the community at large uses his data as their guide to properly measure the operating costs of a company.

"I started Barnes Associates in late 1985, 23 years ago," Barnes said. "After several merger and acquisitions deals it became obvious to me that the industry didn’t fully understand the operating dynamic of the typical security alarm company. The big insight was that these companies have two distinctly different operating functions: 1. the monitoring and service of existing customers and systems; 2. the sale and installation of new customers and systems. While these are interrelated (i.e. more sales typically yields more RMR…depending upon attrition), it became obvious that modeling the financial and operating performance required each of these activities to be estimated, projected and analyzed separately."