1. Barry Epstein President Vertex Capital bepstein4@sbcglobal.net 972-740-2740 SedonaOffice 2013  Vertex Capital

2.  Advisory services specializing in the Life Safety sector  Buy and sell side advisory services across the country  Representation of all types of buyers: local, regional, private equity backed, public  Acquisitions throughout the Life Safety arena, including alarms, integrators, guards, fire/fire sprinkler, medical alert SedonaOffice 2013  Vertex Capital

3.  Why do acquisitions?  Types of buyers and sellers in today’s market  What the seller needs to have and wants to know  Ingredients of the letter of intent  Financing the deal  Looking at a seller’s actual bids SedonaOffice 2013  Vertex Capital

4.  Faster growth  More markets= more of a referral base  Pick up strong sales reps and techs  Smoother revenue stream  Replace attrition- buying an SDM 50 to stay even SedonaOffice 2013  Vertex Capital

5.  Local with $50k in mrr  Regional with $600k in mrr  National account buyer with $4mm in mrr  National company buyer with $8mm in mrr SedonaOffice 2013  Vertex Capital

6.  Relish contracted recurring revenue  Good opportunity for growth through acquisition  Low market penetration vs. other recurring revenue (TV, internet, phone)  Very liquid market = easy exit  Lenders throwing money at large borrowers SedonaOffice 2013  Vertex Capital

7.  Dealer with $6,000 in mrr (contracts/mixed phone line)  Dealer with $32,000 in mrr (good contracts, c corp)  Dealer with $70k in mrr (valuation expectation)  Dealer with $180k in mrr (offices, own central, kids in business) SedonaOffice 2013  Vertex Capital

8.  Signed Contracts  Own The Phone Lines  Attrition Calculation (static pool)  Financial Statements with Adjusted EBITDA  Knowledge of Tax Implications  Legal Representation  Sell Side Representation (State to State)  Multiple Offers SedonaOffice 2013  Vertex Capital

9.  What’s the multiple?  Does contract term matter?  Is there a minimum MRR?  Will the buyer keep my people? Rich man, poor men  Do I have a shot at the holdback?  Is the multiple the price or + b/s items?  Does the buyer have the money? SedonaOffice 2013  Vertex Capital

10.  If wholesale, let your customers know  Put ad in state association newsletter  Put the word out at the association meetings  Don’t assume he won’t sell to you (2 old rams who hadn’t spoken in 12 years)  Look for orphans (Large buyers/small markets too much trouble)  Build a pipeline (They may sell in 4 years)  ASK CONNECTORS SedonaOffice 2013  Vertex Capital

11.  Nonbinding  Multiple  Number of accounts  Amount of recurring revenue  LOI expiration date (ideally less than 4 years!)  Freeze period  Stock purchase vs asset purchase  Accounts only or assets (a/r, inv, veh, fix, lease) SedonaOffice 2013  Vertex Capital

12.  Buying 1,000 accounts at $25 per month= $25,000 in mrr.  Purchase price is 33x, 10% held back for one year.  $25,000 * 33x = $825,000 *.9 = $742,500.  Bank lends 22x or $550,000. Buyer comes up with balance of $192,500 or puts up more mrr to the bank ($33,700 total= no cash upfront) SedonaOffice 2013  Vertex Capital

13.  Attrition has settled down and will remain stable  Number of buyers on increase as banks keep lending  No killer app in sight to destroy monitoring revenue  Utilities trying again to gain tremendous market share  Multiples will remain strong as private equity firms have huge amounts of money on the sideline that must be put to use SedonaOffice 2013  Vertex Capital