GE moves into the fire product market

Plans call for GE to buy Spanish fire product manufacturer Kilsen
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Thursday, August 1, 2002

PLAINVILLE, Conn.-General Electric Corp. announced plans in early July to buy a manufacturer of commercial grade fire alarm systems, a deal that would fill out the portfolio of products offered by its GE Interlogix division.

Plans call for GE Industrial Systems to buy Kilsen, a privately held fire detection and control systems company in Barcelona, Spain. The company soon will become part of the GE Interlogix, GE Industrial Systems Security & Life Safety business team.

Terms of the deal were not disclosed, but if GE gains regulatory approval, the acquisition of Kilsen could close in the third quarter of this year.

"This is a great addition to GE's portfolio in the security business," said Terry Dunn, a spokesperson for GE Industrial Systems. "This gives us a terrific platform for fire protection and systems."

Though GE Interlogix already offers some fire-related products through its ITI brand with its Advent line, bringing Kilsen's brand on board is expected to step that up a notch.
"Kilsen has a much broader range of fire products, both control panels and smoke detectors," said Duane Paulson, vice president of strategic marketing for GE Interlogix. "They help us fill out our expertise."

Kilsen makes conventional and analog fire detectors that use optical, heat and ionized methods. It also offers specialty detectors for aspiration and CO2 detection and fire control panels. And unlike ITI's Advent line, which is geared towards the wireless market, Kilsen's products are hardwired systems.

Company officials at Kilsen could not be reached for comment by press time.

When GE bought Interlogix earlier this year, analysts speculated the conglomerate would continue to build its holdings in the security and life safety market. That prediction now appears to be coming true.

"In our market, GE Interlogix has a broad range of products, but there are areas where we feel w can strengthen our offerings and fire was one of those," said Paulson.

Elana Hordon, vice president of equity research for Merrill Lynch in New York, said GE appears to be vying for the number one spot in the security market. "It would seem that GE is making it a focus, given the Interlogix acquisition and this one," she said. "They're certainly trying to build a position."

The acquisition also helps GE Interlogix become a one-stop shop for security and fire related products.

"It's kind of a dichotomy," said Paulson. "You have a number of dealers who will pick and choose a best of breed variety, but more and more you see a number of dealers and installers are trying to streamline their operations by choosing as few suppliers as possible."

He said it's too early to say whether Kilsen will open offices in North America once the merger is complete.

But an important part of the acquisition, said Joe Freeman of J.P. Freeman Co., is Kilsen's presence in Europe. The company operates offices and training facilities, he said.

"Kilsen gives them a major entry in the fire market, and Kilsen gives them an entrance in Europe," said Freeman, who speculates that other markets, such as Asia and South America may be next for the security business.

Still unclear are the steps that Kilsen will need to take to get their products on the same power requirements found in North America.