Ingersoll-Rand pursues another systems integrator

August 7 , 2003 PARSIPANNY, N.J. - By the end of this month, Ingersoll-Rand expects to complete the purchase of systems integrator Integrated Access Systems and its manufacturing arm Geoffrey Industries, a deal that would mark Ingersoll-Rand’s second acquisition of a systems integrator. The transaction comes nearly a year after Ingersoll-Rand bought Electronic Technologies Corp., an integrator with $40 million in revenue in 2001 and coverage throughout the United States with 33 offices. While Integrated Access Systems is a smaller deal when compared with ETC - Integrated Access Systems has eight offices predominately in the East and revenues of $27 million - the deal represents an important strategic move on the part of Ingersoll-Rand. According to Eli Lustgarten, managing director of research for H.C. Wainwright & Co. in New York, Ingersoll-Rand wants to be more than just a supplier of products. "It’s fine to be a supplier of a system, but they also like the service aspect to it," Lustgarten said. What also appeals to Ingersoll-Rand is the recurring revenue available as a service-related business, said Herbert Henkel, chairman, president and chief executive officer of Ingersoll-Rand, in a prepared statement. As of 2001, 16 percent of Ingersoll-Rand’s total revenues were attributed to a recurring revenue business, such as installation, service and after market contracts, said Paul Dickard, spokesman for Ingersoll-Rand. By the end of this year that number is expected to reach 25 percent, with that growth thanks in part to ETC joining the company last year. Increasing recurring revenue, said Dickard, was part of a strategy mapped out by company officials a year and a half ago. Plans call for Integrated Access Systems to become part of IR’s Security and Safety Sector and operate under the ETC business unit. Geoffrey Industries, a manufacturing division that makes access control boards, software, reader interfaces and digital video recorders, is expected to join IR’s Interflex business unit. That unit provides electronic access control, video management and electronic credential systems. Terms of the transaction were not released. Officials from Integrated Access Systems could not be reached prior to press time. For more on this story, see the September issue of Security Systems News.