Billion dollar deals

 - 
02/17/2016

Billion dollar deals are not exactly daily news in the physical security industry, except in the past three weeks, that is.

Two of the biggest deals in the history of the security industry have been announced in the past three weeks. On Jan. 25 Johnson Controls announced a deal to merge with Tyco.

Yesterday, Apollo Global Management, a $170 billion private equity company, announced it has an agreement in hand to acquire Tyco's former sister company, ADT, for $6.9 billion. Here’s that story.

Apollo first entered the security industry last May when it purchased Protection 1 and ASG.

When the Apollo/ADT deal closes, Apollo plans to combine ADT with Protection 1 under the leadership of Protection 1 CEO Tim Whall.

When JCI announced that it plans to merge with Tyco it said it will lose the Tyco name. Good idea. Even though Dennis Koslowski and his $600 shower curtain and $2 million birthday parties on Sardinia are long gone, the Tyco name is forever linked to ridiculous excess and greed.

On the other hand we have ADT. The combined ADT/Protection 1 company plans to operate “primarily under the ADT brand.”  Not everyone loves ADT of course, but the name is synonymous with security and as someone said to me yesterday: People know the ADT name, whether you like them or not, you feel like you can trust them.

I haven’t had a chance to speak to Protection 1 yet, but in a canned quote in the news release Whall talked about the promise of the combined commercial business.

I spoke to Jeff Kessler of Imperial Capital yesterday and he noted that ADT is really still getting its commercial business off the ground. Protection 1 can help them a lot, he said.

He noted that Tim Whall’s team “invented the scorecard for the industry” idea back when he was at HSM.

The idea behind the scorecard is to find out customers really want (from a security and business improvement perspective) and set up metrics.  Protection 1 (or HSM or Stanley) then measures itself on its ability to meet certain metrics. I’ve written about different iterations of the Tim Whall Scorecard many times.

He noted that Protection 1 has a "very, very disciplined team." (Even with two verys, I'd say that's an understatement.) They've got CMO Jamie Haenggi, CFO Dan Bresingham, and Don Young, who Kessler calls "a superstar, the leading entity in the industry on integrating platforms."