IT integrator buys RadioShack security division

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Saturday, January 1, 2005

HOUSTON - A plan by RadioShack to outsource its security work for its 5,100 company-owned stores turned into a buying opportunity for an IT integrator who is now using the deal as a platform to further its security business.

eLinear bought TanSeco Systems, a security division run by RadioShack for more than 25 years, in early November for an undisclosed price. As a result of the deal, eLinear will not only provide security to RadioShack through a service agreement, but picked up several TanSeco Systems customers, such as Tom Thumb Randalls, a regional grocery store, retailer Tuesday Morning and check cashing businesses Easy Corp. and Cash America.

“It’s a market accelerator for us,” said Mike Mares, vice president of eLinear, a company with five locations in Texas and one in Oklahoma City, Okla.

While eLinear has been providing security services, such as CCTV, access control and installing structured cabling for three years, it accounted for only 10 percent of the company’s business. With TanSeco Systems onboard, security will now account for 25 percent of eLinear’s revenues. The company also offers network and storage solutions, and digital voice and data systems.

RadioShack began looking for an outside security service provider in early September to replace its internal security division, which went by the names Tandy Security and TanSeco Systems. Company officials considered it as a way to save the company money and to enable it to focus attention on its retail business.

“Our decision to get out of the security business was because it’s not a core competency of ours,” said Charles Hodges, spokesperson for RadioShack. “It had no reflection at all on the people.”

Hodges said less than 10 companies placed bids to win RadioShack’s security contract, and the retailer seriously considered five companies whose names were not disclosed. But eLinear won the deal because of its expertise.

“They fulfilled all of our requirements,” said Hodges. “Some of the factors were proximity to Fort Worth and our headquarters, and the ability to interface with our staff.”

One of the factors was also eLinear’s willingness to retain some of RadioShack’s security employees. eLinear hired 38 of 67 employees and relocated them to a new facility in Fort Worth. RadioShack retained approximately 10 people from the security division to manage its contract with eLinear.

Mares expects the TanSeco Systems transaction will serve as one of several deals for the company in the security market. He said eLinear will continue to use the TanSeco Systems name and focus its security efforts on the Dallas/Fort Worth area.