Cable viewed as key by Honeywell
SYOSSET, N.Y. - Honeywell is stepping up its low-voltage wire and cable offering to the security market, announcing in early June plans to buy all outstanding shares of Genesis Cable Systems.
The security product manufacturer already owned 30 percent of Pleasant Prairie, Wis.-based Genesis cable, but the remaining amount had been privately held. The transaction, if it receives regulatory approval, would give Honeywell 100 percent ownership in the business.
Ã¢â‚¬Å“We recognized they were a likely strategic partner for us goingÃ‚Â forward,Ã¢â‚¬ÂÃ‚Â saidÃ‚Â Jim Coleman, chief executive officer of Genesis Cable, on the decision to sell to Honeywell. Ã¢â‚¬Å“At some point we knew we would need to address a change in the relationship from a minority partnership to a majority.Ã¢â‚¬Â
When Genesis Cable formed in 1996, the Pittway Company, which at one time owned Ademco and a number of other security brands, became an equity partner in the business founded by Coleman and Kerry Glicken, president. That 30 percent stake in Genesis was later taken over by Honeywell when it acquired the Pittway Company.
For Genesis Cable, that relationship worked well. Coleman said the company received financing to begin, while the Pittway Company had a hand in that side of the business. The companyÃ¢â‚¬â„¢s bread and butter is structured wiring, which was installed in 42 percent of new homes, according to numbers from 2002.
But as the cable manufacturer looked towards the future and continuing with its more than 20 percent annual growth rate, the owners of the company, which includes Coleman and six other members of management, decided it was time to solidify the relationship.
For Honeywell, the timing was also right to move from being a passive investor to owner of the business. Numerous security products, from video and access control systems, to burglar alarms and thermostats, rely on low-voltage cable.
The companyÃ¢â‚¬â„¢s planned acquisition of Genesis Cable is also in line with acquisitions made by other security product manufacturers. GE Security, a competitor of HoneywellÃ¢â‚¬â„¢s, owns two cable companies - Fiber Options and International Fiber Systems.
Ã¢â‚¬Å“We feel that the structured and related low-voltage products are an important part of our strategy going forward,Ã¢â‚¬Â said Ron Rothman, president of Honeywell Security and Custom Electronics.
Coleman said Genesis Cable will retain its facility here, a 62,000-square-feet combination office, engineering and manufacturing plant that employs 270 people. But next year, Coleman expects the company to relocate to a larger facility, as it looks to keep up with growth.
Terms of the deal, which is expected to close in July, were not released.