Elk and Systems Depot decouple ownership

Monday, October 1, 2007

HICKORY, NC--Systems Depot, a distributor of security products, will move into a 90,000-square-foot facility here, to be vacated by GE Security by the end of the year. The move is part of many changes for Systems Depot, including the addition of new president Jeff Neuville, and owner Wade Moose's partial divesture of its sister company, home integration and automation manufacturer Elk Products.
"We're making a lot of changes," said Moose, "and one of the major things that we're doing is trying to unhook these two companies in ownership and connection."
Going forward, there won't be a conflict of interest for distributors who'd like to carry the Elk product line, but don't want to subsidize their competition, Moose said.
Elk will now be run by president Hans Peterson, but will retain its engineers, many of whom were with Wade Moose when he founded Moose Products more than 30 years ago. He sold Moose to Aritech, which was bought by Interlogix, which was bought by GE Security, which just moved out of the building that Moose once manufactured in and which Systems Depot will now occupy.
How's that for coming full circle?
Peterson's buy in has added more than $12 million to the balance sheet, he said, "so we have more capital to continue to innovate, to continue to get the word out. The balance sheet looks pretty powerful." Peterson, like Neuville, comes from outside the security industry, having spent time in marketing, brand-management, business development, and business management roles at companies like 3M and Johnson & Johnson, before buying into an electrical component business in 1999. After selling that company to Thomas & Betts, Peterson "wanted to do it again," he said, "find a business that had incredible engineering and tech capabilities ... and be able to impart some of my background."
Moose is retaining an equity stake in the company, but will focus now on engineering and product development, he said. "Where I did my biggest damage in life was actually designing products," he laughed. Moose said he founded Moose Products more than 30 years ago after a start in the industry as an installer. Tired of always wishing something had one more output or one more channel, he began developing his own products, something he's eager to get back to.
He'll also continue to advise Neuville, who has a track record of his own of accelerating company growth, mostly in the textile industry. Neuville said he left that industry because he was tired of seeing manufacturing jobs move overseas, and is excited to join a security industry he sees as "very exciting ... and one with much growth potential."
Though he's still new to Systems Depot and learning the customer base, Neuville said he'd be focusing on "making sure we've got the right products in stock when the customers need them, and providing training and making sure we're trained to understand the products our vendors offer ... Distributors, the good ones, are more than order takers. They're resources for their customers and we want to continue down that path."
Notably, Moose said, Systems Depot will not continue to expand their product line into other low-voltage markets, rather focusing very tightly on the fire and burglar alarm marketplace.
"Everybody else wants to be the biggest and best low-voltage distributor, and we're going to de-emphasize that," he said. "We'll be the world's best distributor of burglar and fire alarm equipment."
Elk Products will move in the opposite direction, seeing home automation and high-end A/V as places where its systems can help dealers generate new revenue. "We're committed to a cross-platform, open-system philosophy," Peterson said. In fact, one of Moose's pet projects is to develop ways for Elk dealers to help their customers use Elk access and home control systems to reduce their energy costs.
"We plan to be the system that everybody else wishes they had," Moose said, "the system that goes into the house of the future."