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Gold/Mining/Energy : MYT - Mytec Technologies
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To: JOHN RIXON who wrote (1072)7/10/1998 10:16:00 PM
From: Investor 007  Read Replies (1) of 1535
 
Intuitively, alarm monitoring should be an attractive business and source of revenue growth for cable companies, particularly in their race against telephone companies to dominate the communication market to consumers in the home. They have the infrastructure (cable) with ample band with, selling resources, installation and administrative support. So why did it not work out for Rogers? What did they find so unattractive about the business? And why would anyone (American or otherwise) overpay to acquire an asset which to Rogers, produced disappointing results?

Sure Protection One gets immediate market share and that has some value. But my guess is that they didn't overpay to the extent you have suggested and that there are other deal terms which factor into the equation. Purchasers with a lot of money are not stupid; that's why they have a lot of money in the first place.

I'm from Missouri on this one.

I'd be more inclined to ask Counterforce dealers what multiple they get when Counterforce buys their accounts. I might then scale that multiple up slightly when valuing Counterforce because of the large concentration of accounts, on the theory that the whole is greater than the sum of the parts. However, if Oss and his band of merrymen decide to go elsewhere for their service and can do so at any time, I'd be less inclined to pay much of a premium for Counterforce. Unlike Rogers, it doesn't own the cable network and therefore doesn't have the same control over the customer.

That's my take on the situation. I'm not privy to much industry dealing, but intuitively this makes sense to me.
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