Recent ADT and Alarm.com deals making waves

Recent mega deals — Alarm.com acquiring OpenEye and ADT bringing on I-View Now — couldn't be timelier as this month's News Poll looks at the topic of M&A, which seems to be as active as ever with big deals hitting what seems like weekly.

These two deals, which happened within the same week, are making waves in both the residential and commercial markets.

SSN caught up with John Mack, executive vice president and co-head of Investment Banking with Imperial Capital, which represented OpenEye in the Alarm.com deal, who said that the deal makes a lot of sense for Alarm.com.

“Alarm.com has a lot of exposure to the residential alarm business, and while there still is good potential there, to try and continue to show 20- to 25-percent year-over-year growth, diversifying into other channels that are going to show strong performance is going to be important,” Mack said. “Commercial is probably the biggest and most obvious of the areas to move into and this deal is an important enabler for commercial, where video and related information is increasingly critical to success in that sector.”

He continued: “They've got the intrusion piece; they have been developing the access control piece; and this OpenEye deal gives them the cloud-managed video piece, so they kind of have the triple play, as well as all of the accouterments that you can add to the triple play, like video analytics, where they have some of the leading engineers and also in software, data analysis and cloud hosting, so they are a pretty formidable competitor.”

Mack pointed out that this deal is also indicative of the interest there is in cloud and managed services, noting that there is strong M&A activity in this area.

Looking at the ADT deal for I-View Now, George De Marco, ESX chairman/managing partner, DECO Ventures LLC, noted on the phone and in his blog that alarm verification technology, like I-View Now's, propels monitoring services to the next level.

“With the recent announcement of ADT's purchase of I-View Now's technology, this move may finally propel the industry to aggressively adopt and adapt next-gen solutions that use sensors, images and data to effectively determine the threat level from an intrusion or fire alarm activation,” De Marco said. “False alarm dispatches may finally become a thing of the past.”

False alarm dispatches have plagued first responders since the dawn of the alarm industry, he noted. “Always a contention, the common denominator with police departments is that — 98 percent of all dispatched alarms are false and draw valuable resources away from other police priorities.”

Mack noted that Larry Folsom introduced video verification technology that is “critical to the residential alarm business. The professional residential alarm business needs to be much more focused on verification and reducing false alarms and they have been talking about it for years in the industry. This is the technology to kind of make that real and to be serious about solving this problem. This technology is the wave of the future and ADT wants to be out in front and say that it is the point of differentiation for buying an ADT system.”