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New Orleans looks toward CryWolf

Wednesday, September 23, 2015

New Orleans is looking at outsourcing its false alarm fine management and collections to CryWolf False Alarm Solution from Maryland-based Public Safety Corp, according to a report from The Times – Picayune for Greater New Orleans.

This particularly interested me because, just last week, I spoke with SIAC’s executive director, Stan Martin, about the process of automating false alarm fine collections, following a report that Pittsburgh was considering it.

When talking with Martin he said it was a great practice, one that SIAC recommends.

Martin said that increased collection efforts, through automating or outsourcing the process, can have a positive effect on reducing false alarms. Properly administrated fines provide offenders with an incentive to change their behavior.

I greatly look forward to following up with Public Safety Corp. about CryWolf and how it can help a city with false alarm management. CryWolf has worked with cities such as Atlanta, Los Angeles and Sante Fe, N.M., according to its site. 

Battery closes NICE deal, renames security company

Monday, September 21, 2015

BOSTON— Battery Ventures today closed the NICE physical security business unit deal and announced that the new independent business will be called Qognify. 

Battery Ventures announced its intention to acquire the business for "up to $100 million" in August. Here's a story on that announcement.  Today's announcement did not include details on the final price.

In August, I spoke to Battery Ventures' Jesse Feldman about the deal. I have a call into Feldman to talk more and I'm hoping to catch up with Moti Shabtai, former GM of NICE's PSBU, who was named president of Qognify, at ASIS. Sept. 22, 2015 Update: Here's an interview with Quognify's Moti Shabtai.

Feldman said that Battery plans to continue to invest in the PSBU and expand into other market segments. In addition to possibly adding access control capabilities, Feldman said that Battery would consider acquiring analytics capabilities, video and otherwise. NICE's customers include banks, utility companies, airports, seaports, city centers and transportation systems and sports venues.

Here's the company's new web site.

Insider's look at non-traditional GHS deal

Wednesday, September 16, 2015

As you can read on the SSN website, GHS Interactive Security recently secured a $50 million credit facility. 

Michael Barnes, founder of Barnes Associates Inc., the consulting and advisory firm that specializes in the security alarm industry, provided SSN with interesting insights about the non-traditional deal, noting that GHS had recently reached a milestone $500,000 in RMR.

Here’s what he told SSN:

“GHS is a very interesting company. Steve Baker and Topspin Partners were looking for an opportunity in the industry and liked the idea of buying a sales and installation engine and building a full-service company around that, as opposed to buying an existing integrated alarm company.  We [Barnes Associates] had sold an ADT dealer the year before and knew there was real value in companies that have the account origination capability … but no RMR.

“This is not the normal path by which private equity invests in the industry. Typically, they seek out fully operating companies that have a material customer base and RMR that can be leveraged, Day One. At market prices for these companies, however, most investors can’t get the returns they are looking for without substantial growth after the initial acquisition.

“Steve Baker and Topspin Partners recognized that buying a highly capable originating company, and then building up the operations around this capability and the RMR they could generate afforded the chance to grow a large successful company using a better cost dynamic. Rather than buying a fully functioning, integrated alarm company and then taking the risk associated with developing additional growth capability at a low cost, they bought the growth engine and took the risk that they could build a functioning full-service company around it.

“Basically, this is following the path Vivint took, where they first developed a material account origination capability and then started to keep the accounts and build up the necessary infrastructure to own and service them.

“Steve Baker knew the perfect company to acquire—LifeLine Security. The company was founded and owned by Gordon Johnson and John Fox, who had perfected the year-round door-to-door sales model (as opposed to the “summer sales” model), in several California markets. They were generating almost $200,000 a year of new RMR under a dealer program and were looking for a way to change their model to one that would build a fully integrated company.

“Gordon and John also had experience earlier in their careers in other parts of the Southwest, and had the proven capability to expand into new markets. This meshed with Steve Baker’s vision to broaden geographically into Texas, Arizona and Nevada in order to have a more diversified footprint and a larger overall market opportunity.”

“Starting with no accounts in mid-2013, when GHS acquired LifeLine, they have grown to over $500,000 of RMR.

“This rapid growth requires capital, and we have enjoyed working with the GHS team to develop the best approach to satisfying this need.  We identified Topspin Partners as the best fit for the equity, given their highly successful prior play in the industry and their appreciation for the opportunity. The debt part of the capital structure was a challenge, however, as the company needed a lender that could start small, Day One, and grow rapidly with the company.  Most of the lenders that truly understand the industry dynamic typically require the full servicing infrastructure to be in place and proven, and a seasoned existing account base.  Neither of these were present with GHS.  Additionally, most of the industry lenders had minimum initial borrowing amounts well above GHS’s initial need.  We found a division of Barclays that provided the initial facility.

“Fortuitously, Brent Humphries and Patrick Fear had left Barclays and moved to Alliance Bernstein to head up a very large non-bank debt fund, AB Private Credit Investors. Brent and Patrick were instrumental in setting up the initial facility and were intimately familiar with the company. We conducted a relatively broad placement process, and they quickly distinguished themselves by proposing a highly flexible package of debt capital that met every one of GHS’s needs, along with highly competitive pricing and an ability to cycle through the approval and closing process quickly.  Since they are not a bank, they brought an inherent flexibility that was attractive.  They are truly a capital partner, rather than a “lender” in the traditional sense.

“AB was great to work with.  Not only are they perfect for GHS, but I know they have the appetite to do more in the industry.”


Reorg at Honeywell

Wednesday, September 16, 2015

MELVILLE, N.Y.—Honeywell is making changes. Yesterday, the company made an internal announcement that it’s combining its security and fire businesses into one new business, Honeywell Security and Fire (HSF).

David Paja, who took over as president of Honeywell Security Group in January, has been named president of HSF.

HSF will be a business unit within Honeywell Automation & Control Solutions (ACS) division. 

Paja will report to Alex Ismail, president and CEO of ACS. Before being named president of Honeywell Security Group in January, Paja was VP and GM for Honeywell Transportation Systems in China and India.

Gary Lederer, president of the legacy Honeywell Fire Safety business, will lead the integration of the businesses until 2016, when he will retire. Lederer has been with Honeywell for 16 years and in the life safety business for 27 years.

The Honeywell sales teams in the legacy HSG and HFS businesses will remain in place.

A Honeywell internal announcement said: “The company remains committed to supporting its customers with the same level of reliable and quality products, service and delivery throughout this process, with a focus on transparency and open communication.”

It also said that “the combination of the two businesses offers a broader and more robust portfolio of best-in-class products and end-to-end connected solutions for Homes and Buildings.”

Novi looks to bridge gap between DIY/MIY and traditional companies

Wednesday, September 16, 2015

DIY and MIY—Monitor-It-Yourself—have been big topics lately. Gavin Tanner, VP of marketing for the new startup DIY security company Novi, told me that Novi is looking to “bridge the gap” between the DIY and traditional security companies.

Tanner said that Novi bridges this gap by offering a spectrum of options, ranging from MIY, pay-as-you-go monitoring, and constant professional monitoring. 

I recently saw a report comparing Novi to nationals like Vivint and ADT. A primary difference is Novi doesn’t charge monthly fees, installation costs or have contracts, while traditional security companies do. I wanted to take a closer look at the main differences is both installation and monitoring.

Novi’s product, the Guard, incorporates a camera, smoke detector, motion sensor and into one device. The Guard is battery operated and connects to a hub linked with the user’s router. It has not been officially released, Tanner said, but roll out should begin in the next 6 weeks. The most basic model of Novi’s system is entirely DIY install and MIY.

“We offer you the DIY benefit of self install … there’s no contracts, there’s no monthly fees to use it,” Tanner said. “That being said, we have additional features that you can add-on, features that you would often find at a traditional security company like ADT.”

“We [will] offer professional monitoring at a monthly rate, [but] there’s still no contract—you can opt out at any time. We offer cloud storage—which, again, [has] no contract.” It can also incorporate a cell connection, he said.

Tanner said Novi’s monitoring would be at a third party monitoring center, though he declined to say which central station.

Novi is currently exploring a pay-as-you-go option for professional monitoring as well, Tanner said. As examples of pricing, Tanner estimated full monitoring would cost around $8 to $12 dollars per month, or $4 to $5 per week.

Tanner said that the company is exploring how to give customers the option of professional installations, through installers close to them. 

Novi is based and manufactured in Orem, Utah.

CSAA meeting draws crowd

Wednesday, September 9, 2015

More than a month in advance, CSAA’s hotel block for its annual meeting sold out. Talking with Elizabeth Lasko, the organization’s VP of marketing and communications, this booking was faster than in previous years and AHJ presence alongside expanded educational sessions might be why. The meeting will be held in Sonoma, Calif., Oct. 10-14.

“We are pleased to have sixteen representatives from AHJ organizations attending, our largest representation in several years,” Lasko said, which includes Chiefs of Police, State Fire Marshall and Sheriff organizations. These groups have time both by themselves and with the CSAA members, she said. “They’ve got their own unique challenges that they want to alarm industry to be aware of, and we’re working hard to build those relationships.”

“We think that we’ve done a good job listening to the members who said they want to see a ramped-up education program,” Lasko told me. “[Members have] responded by signing up early and in high numbers.”

The meeting has three featured speakers, covering topics such as cybersecurity as it pertains to alarm monitoring, and understanding different people and personalities. Lasko also pointed to a session on understanding what current health care trends mean for employers as a key benefit for attendees.

There is still space for more attendees at the meeting; they would just need to make other hotel accommodations.

Here comes ISC East!

Wednesday, September 9, 2015

 I hope everyone has had a great summer! I know I have. Too short here in the Northeast, of course, but it’s always fabulous.

And here comes ISC East! Just weeks away, Nov. 18-19. The SIA-sponsored show in the Big Apple promises to provide “insights, education” and information about “the latest products, technologies and services” in security.

There will be more than 200 exhibitors, including 50 companies new to the show, according to SIA, not to mention educational sessions, networking opportunities and more. 

Look out for my exec ed, Martha Entwistle, while you're there. If you have any great story tips on resi security, pass them along to her and she'll pass them along to me. I'm always lookin for trend articles, stories about companies growing, expanding their territorty and so forth. Just give me a shout! 

Where integrators can go for cybersecurity advice, expertise

Wednesday, September 9, 2015

Researching cybersecurity is eye-opening, PSA Security Network CEO Bill Bozeman told me during a recent call about PSA's cybersecurity program, which is moving into its second year.

Bozeman said that "when and if" a cybersecurity breach occurs in a physical security system, integrators will be "in the line of fire" in terms of liabillty.

With the objective of "educating our partners about cybersecurity so they can mitigate the risk," PSA has formed partnerships with cybersecurity service providers and manufacturers who have "proven expertise" in cyber security.

Among the partners is a law firm that specializes soley in cybersecurity law for physical security companies. In my opinion, that alone should make integrators think twice about ignoring cybersecurity education.

Bozeman emphasized that PSA is not in the business of certifying or testing any products or services. Rather, Bozeman has been working with a group of cybersecurity experts and some integrators to "vet" partners for integrators.

PSA is launching a webinar series to introduce cybersecurity partners to integrators and "set up potential parnterships." The series launches this month and will go through April.

PSA has also come up with a checklist of "Six things integrators can do now" to protect their businesses. Here's the list. More details are available here.

1. Conduct a cybersecurity assessment

2. Educate your team

3. Purchase cybersecurity insurance

4. Update your contracts

5. Choose cyber-hardened products

6. Educate your customers


Vector takes on 17,000 new customers

Wednesday, September 2, 2015

PITTSBURGH—Vector Security has acquired Pelican Security Network Inc., a regional alliance of independent life safety and security services providers, fire protection companies, alarm dealers and systems integrators based in Baton Rouge, La.

The employees and more than 17,000 Pelican customers merged with Vector Security on Sept. 1, according to a prepared statement from Vector.

Amy Varisco will lead the newly formed Gulf District, which includes the Pelican Security Network of companies, for Vector Security, according to the company.

“In Vector Security, we have found the perfect company to transition our valued customers,” said Louis J. Resweber, Pelican president and COO. “We have been impressed with Vector Security, watching as they grow and provide exceptional service to their customers, all with a focus on the regional support that communities want and need. I am confident that Vector Security will provide the quality products and customer service our customers have come to expect from Pelican Security Network since 1998.”

Pam Petrow, recently named CSAA president and Vector CEO,  “We look forward to introducing the Vector Security brand to the Louisiana, Texas and Mississippi markets as we focus the company growth across these regions in the coming months.


Management reorg at Avigilon

Wednesday, September 2, 2015

Avigilon, a video surveillance and end-to-end security solution provider, today announced two resignations and a management reorganization.

Bryan Schmode has resigned from his role as COO, and Collis Heath, SVP of Global Operations, has also left the company.

There have been a number of changes in Avigilon’s management ranks over the past few months. In August, Pedro Simoes, SVP of global sales, resigned and was replaced by James Hendershot. In May, Danny Cam, VP of Engineering left and was replaced by CTO and SVP Mahesh Saptharishi.

There have been several management changes in the past few years as well. The company announced today plans to streamline its senior management reporting structure “to increase operational efficiency.”

Avigilon's seven major departments—product development, sales, marketing, operations, finance, legal, and human resources—will now report directly to Alexander Fernandes, Avigilon's founder, president, CEO, and Chairman of the Board.

“This refreshed structure brings Mr. Fernandes closer to Avigilon's day-to-day operations while empowering department leaders with greater authority,” the company said in the announcement.

Avigilon has been one of the fastest growing security companies. Its stock, which trades on the Toronto Exchange, closed at $12.37 on Sept. 2. Its 52-week high is $25.62. Its low is $12.34.