Stanley buys Pinnacle

New division becomes largest in unique corrections vertical
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Thursday, June 1, 2006

NOBLESVILLE, Ind.--In March, Stanley Security Solutions, a division of Stanley Works, announced the acquisition of Pinnacle Electronic Solutions, a leading provider of security integration in the corrections vertical. Pinnacle will be combined with Stanley Integrator.com, purchased by Stanley in 2003, to form Stanley Correctional Services.
This, said David Beeler, director of national sales for Integrator, will represent the biggest player in the corrections vertical. "With what we feel the market is, we feel we're about 25-30 percent of the market now," he said. "We feel there may be other ones this size, but not that we know of. We're leaving behind much smaller players around the nation who tend to be more territorial. There are very few national companies at this point."
The fact that Stanley's only close national competitors, Siemens and Diebold, generally focus on the commercial and financial sectors, respectively, makes likely what Beeler claims is true.
"It's kind of neat," said Beeler, "that Stanley has taken the, well, I call it the unpopular vertical, and has already captured the lion's share of the market."
Why is it so unpopular? Jeffrey Washington, deputy executive director at the American Correctional Association, put it simply: "We don't have people who are trying to break into prisons. Instead, you have to stay ahead of the game from people who have a lot of idle time on their hands." Also, he said, the general public can be loathe to spend money on jails, so budgets are often tighter than in other sectors of government: "They're asked to do more with less."
Plus, said Beeler, "Jails need a ton of accountability," as there are constant disputes, many turning into legal matters, between inmates and correctional facilities. Therefore, audit trails and redundancy have to be built into solutions in ways that are not typical to other verticals.
Beeler said that the acquisition of his former direct competitor, Pinnacle, is a good geographic play, giving them strength in the Northeast, and a good addition to his company's skill set. "Integrator is very much an engineering firm," he said, "and they have all the site capabilities." Where once integrators would contract out electrical and installation work, it's likely they won't have to do that in the future.