Sale of security arm up in the air at Adelphia

Thursday, July 1, 2004

NEW YORK - Adelphia Communications Corp. finds itself in the middle of a Chapter 11 restructuring - but how that affects the company’s security arm is a question still in need of an answer.

The security division, which operates as Checkpoint Ltd. in Florida and Adelphia Security in New York, is rumored to be a piece of the pie that may be sold to assist the communications company in its financial re-evaluation. But officials were reluctant to comment on any specific plans of attack.

“The company is trying to work out how to handle its separate businesses,” said Erica Stull, a spokesperson for Adelphia.

Stull also said the bankruptcy filing and the security business are topics that lie at opposite ends of the table.

“They are two separate issues,” Stull noted.

Sources within the security industry expect the security piece of the business to be sold off separately. One source, who asked not to be name, speculated that unsuccessful bidders from the sale of Protection One and Honeywell, might flock towards the opportunity - bringing large capital to the deal. Another option is that a new entry into the security market could use Adelphia Security as a springboard for larger opportunities in the market.

Adelphia, the fifth largest cable television provider in the country, entered bankruptcy protection in 2002 amid an accounting scandal. Officials say upper management overstated Adelphia’s subscriber numbers - counting the company’s 60,000 security subscribers as basic cable subscribers.

Checkpoint Limited had at one time been active on the acquisition front - building growth through purchases in the early part of the decade. The company even developed an authorized dealer program and tapped California-based Security First AlarmGroup to manage it.

“I did put together a dealer program for them,” said Tony Smith, owner of Security First and president of Security Finance Associates, “and nothing ever happened with it.”

Smith cited the death of one of the company’s owners as one reason the program stalled.

A spokesperson for Checkpoint referred calls to Adelphia’s corporate communications office, but did mention that the company’s buying patterns are on hold.

Stull said Adelphia will continue to handle its restructuring as a financial situation, and the company’s businesses will run as usual.

“We are evaluating all of our options,” she said, “and that work is ongoing.”