Know thy contract
MONTREAL - In an unlikely marriage of companies, remote access provider C-Chip Technologies signed a letter of intent to acquire Unique Security for $1.3 million in an acquisition that provides C-Chip immediate access to the alarm companyÃ¢â‚¬â„¢s monitoring base and standing within the emerging market of automatic vehicle location.
C-Chip plans to leverage the full-service alarm companyÃ¢â‚¬â„¢s commercial and residential client base of 6,000 by offering enhanced services such as remote automobile tracking. Potential customers outside the existing accounts include car rental agencies. Agencies could use the service to locate and disable stolen vehicles, as well as those not returned by their customers. The primarily stock transaction is expected to close this month.
Ã¢â‚¬Å“This is the first time I see a company outside the security industry buying a monitoring company,Ã¢â‚¬Â said Deepak Shetty, program manager for auto identification and security at Frost & Sullivan. Shetty speculates the deal was solidified by the geographic location of the two companies - both maintain headquarters in Montreal.
However, given the competitive nature of international and regional monitoring companies, the deal makes sense. Alarm companies Ã¢â‚¬Å“have to increase their product portfolios to increase revenue,Ã¢â‚¬Â if not they risk attrition and ultimately failure, Shetty said. As for C-Chip, they Ã¢â‚¬Å“donÃ¢â‚¬â„¢t have to start from scratch, they go through existing contracts through Unique.Ã¢â‚¬Â
Founded in 1974, Unique Security is a U.L.C. certified central station that reported nearly $3.7 million in revenue for its fiscal year, ending August 2003. There are no plans to relocate the center, and its headcount of about 250 will remain intact.
The two companies started discussions this spring, according to Unique Security founder and President Jean-Guy Vandal, when the former owner of Canadian Security Agency, a company C-Chip acquired earlier this year, asked if Vandal would be interested in meeting with company executives to discuss a merger or acquisition.
Ã¢â‚¬Å“I understand one thing about business, to do a bigger business you have to grow all the time,Ã¢â‚¬Â Vandal said. Ã¢â‚¬Å“I sell because they want my central, and they want my know how.Ã¢â‚¬Â
Vandal started Unique Security with three partners, but eventually bought out two of the stakeholders. In 1996, he became the sole owner when the remaining partner died.
Vandal, 66, will remain president of Unique Security, which will become a wholly owned subsidiary of C-Chip. Ã¢â‚¬Å“I donÃ¢â‚¬â„¢t want to stop working,Ã¢â‚¬Â said Vandal. His son Patrick, 35, who joined the company in 1997, will continue to serve as vice president once the deal is finalized.