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SECURITY ASSOCIATES INTERNATIONAL, INC.
______________________
SUPPLEMENT NO. 1 DATED JULY 2, 1998
TO PROSPECTUS DATED APRIL 22, 1998
On October 20, 1997, the Company commenced its offering of an aggregate of
2,000,000 shares of common stock, $.001 par value per share (the "Common
Stock"), warrants to purchase up to 2,000,000 shares of Common Stock (the
"Warrants") and 778,088 shares of Common Stock which may be offered for sale by
certain selling stockholders (the "Selling Stockholders"). On April 22, 1998,
an additional 1,000,000 shares of Common Stock were registered for sale by
Selling Stockholders. As of July 1, 1998, 54,000 shares of Common Stock have
been issued by the Company pursuant to this Prospectus. This Supplement No. 1
expands upon, amends, modifies and supersedes certain information contained in
the Prospectus and must be read in conjunction with the Prospectus. Unless
otherwise defined, capitalized terms used herein shall have the same meanings
as in the Prospectus.
1. The section of the Prospectus entitled "Business - Recent Central
Station Acquisitions" is hereby supplemented as follows:
Acquisition of Texas Security Central, Inc.
On June 17, 1998, Security Associates International, Inc. ("SAI")
purchased all of the outstanding capital stock of Texas Security Central, Inc.,
a Texas corporation ("TSC") from The Willis Tate, Jr. Charitable Remainder
Unitrust for Southern Methodist University and Ray Hooker, who are unaffiliated
with SAI and were the sole stockholders of TSC.
The purchase price, which was based primarily on the recurring monthly
revenue and arrived at by arm's length negotiations between the parties, was
$6,846,000, which was paid in cash at closing. $4,450,000 of the purchase
price was financed by drawing on SAI's existing credit facility with FINOVA
Capital Corporation and the remainder of the purchase price was financed from
SAI's general corporate funds. The acquisition will be accounted for under the
purchase method for financial reporting purposes.
TSC is a third-party alarm monitoring company serving approximately 65,000
alarm monitoring subscribers and approximately 400 independent alarm dealers
from central monitoring stations located in Dallas, Texas, Houston, Texas and
San Antonio, Texas. The acquisition will allow SAI to offer central monitoring
services from a broader geographical base.
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Acquisition of the Monitoring Business of Fire Protection Services
Corporation D/B/A Mountain Alarm
On May 8, 1998, SAI purchased the monitoring business of Fire Protection
Service Corporation, a Utah corporation, D/B/A Mountain Alarm ("Mountain").
The purchase price, which was based primarily on the recurring monthly
revenue and arrived at by arm's length negotiations between the parties, was
$944,875, $674,875 of which was paid in cash at closing with the remainder of
the purchase price paid in the form of 54,000 shares of SAI's Common Stock.
The purchase price was financed from SAI's general corporate funds. The
acquisition will be accounted for under the purchase method for financial
reporting purposes.
Mountain is a third-party alarm monitoring company serving approximately
7,800 alarm monitoring subscribers and approximately eight independent alarm
dealers from a central monitoring station located in Ogden, Utah. The
acquisition will allow SAI to offer central monitoring services from a broader
geographical base.
2. The Section of the Prospectus entitled "Management" is hereby
supplemented as follows:
HOWARD SCHICKLER, age 50, has served as General Counsel of the Company
since January 3, 1997, was appointed Secretary of the Company on October 7,
1997 and Vice President on April 13, 1998. Before joining the Company, Mr.
Schickler spent eight years with Sachnoff & Weaver, Ltd., a Chicago law firm.
He became a member of that firm in 1994. Before embarking on his legal career,
Mr. Schickler was employed in the investment field as an institutional fixed
income sales representative for The First Boston Corporation, Morgan Stanley &
Co., Blunt, Ellis and Loewi and E. F. Hutton & Co. and as a portfolio manager
at MGIC Investment Corporation. Mr. Schickler has a B.A. degree from Brooklyn
College, M.A. and M.B.A. degrees from The University of Wisconsin at Milwaukee
and a J.D. degree from Northwestern University.
3. The Section of the Prospectus entitled "Securities Covered By This
Prospectus" is hereby supplemented as follows: After the seventh paragraph
which begins "Sales by Selling Stockholders by means of this Prospectus..." the
following paragraph is hereby added:
Selling Stockholders may pledge the Common Stock to Bear Stearns
Securities Corp. ("Bear Stearns") or to another broker as collateral for margin
loans. In the event of a default by such a Selling Stockholder, Bear Sterns or
such other broker may offer and sell the pledged shares of Common Stock in the
manner described in this section of the Prospectus. Additionally, the Common
Stock may be sold from time to time by pledgees, donees, transferees or other
successors in interest, including but not limited to Bear Stearns.
"THESE ARE SPECULATIVE SECURITIES.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS."
