Snyder departs, ADT looks forward

Saturday, April 1, 2006

BOCA RATON, Fla.-- Since ADT president Michael Snyder took the industry by surprise on Feb. 8 when he announced that he was leaving ADT after 28 years to become chief executive officer for Internet phone company Vonage, ADT has limited its remarks to a statement confirming the departure and both Snyder and Vonage founder, Jeffrey Citron, declined several requests for comment.
The departure came on the heels of Tyco's January decision to separate into three publicly traded companies. Tyco Fire and Security is the parent company of ADT.
Asked if Snyder's leave-taking will have any bearing on the direction of ADT, Sheri Woodruff, vice president of media relations, said, "This does not signal a new direction for ADT, but we are confident that the company will be capably led by John Koch [who joined ADT as chief operating officer in January] going forward."
She said Koch will be assessing any areas that may need improvement, but that it was "too soon to provide any details."
She said that Ed Breen [Tyco chief executive officer] and Chris Coughlin [Tyco chief financial officer] "will continue to lead the company that comprises Tyco Fire and Security and Tyco Engineered Products and Services."
"When the separation is complete in about a year the companies will be combined and have a new name," Woodruff said. A new name has not yet been decided.
No replacement for Snyder had been named as of March 13, and Woodruff said that no timeline for replacing him had been established.
ADT's statement confirming Snyder's departure also noted Koch's appointment "together with other strong managers, positions ADT well for continued future growth." Other managers include Tyco Fire & Security president Dave Robinson, who is "on board as well," said Ann Lindstrom, ADT director of corporate communications.
Bob Neely is the executive director of the Florida Alarm Association, one of the country's largest, with 900 members. Asked how a move like this affects alarm dealers--both ADT and non-ADT--Neely surmised that the impact would be mainly internal.
"When corporate executives of the talent and caliber of Mike Snyder move around it does have a bearing on how a company is valued in the big picture," he observed. "The day-to-day operations are overseen by [upper level executives] and overall they do a good job, but once policies are set in motion, [an internal shift such as this] does not cause any drastic changes for the nuts and bolts of daily operations of dealers," he said.
The Snyder news was a topic of interest at the February Barnes, Buchanan & Mallon security conference, said Jack Mallon of Mallon Associates.
The general consensus at the conference was that Snyder's departure would be a "win-win move, a good opportunity for Snyder going forward and good for ADT," Mallon said.
Mallon predicted the new management lineup at ADT--which includes Koch--combined with the recent spin off of Tyco's security division, would result in "more focus on that part of the company."
Snyder was in senior management during some major changes at ADT, including the creation of its authorized dealer program that today serves as a model for numerous other dealer programs. He also weathered the 2003 restructuring of ADT's dealer program that dramatically limited the number of accounts it would buy from its 700 dealers, Mallon noted that ADT, "has been treading water lately, with a growth rate that was nominal."