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AT&T gets into mobile PERS; Puro resigns at CRN Wireless

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Wednesday, February 27, 2013

Mobile PERS is fast becoming the land of the giants.

AT&T is the latest to get into the game, announcing on Feb. 21 that it will provide the wireless network and location services for Libris, a mobile health management system from Seattle-based Numera Inc. The news follows ADT’s announcement in January that it’s getting into mobile PERS by partnering with Toronto-based health tech provider Ideal Life.

The target market for both ventures is similar: active senior citizens looking for an extra measure of safety, and those with chronic conditions who want health monitoring inside and outside the home. Libris delivers by integrating biometric readings, two-way mobile voice, automated fall detection and location tracking.

“Incorporating continuous monitoring of an individual’s activity, location and important health measurements, [Libris] breaks new ground in bringing together personal safety and telehealth in a mobile device,” said Chris Penrose, senior vice president of emerging devices for AT&T, in a prepared statement.  

While the competition for remote patient monitoring is getting more intense, there’s probably a lot of room left in the sandbox for players of all sizes. The telecare and telehealth market is expected to exceed $1 billion by 2016 and grow to $6 billion by 2020, according to Numera.

Puro resigns at CRN Wireless: In other PERS-related news, e3 Investment Partners announced this week that Nicholas Puro has resigned as CEO of CRN Wireless. He will focus on other opportunities in network services, monitoring and security, according to an e3IP news release.

“I am particularly interested in network services and wireless monitoring in the medical and pharmaceutical field,” said Puro, who is listed on LinkedIn as managing director of e3IP. “There are vast opportunities for new products and services ranging from fully mobile personal emergency response systems to wireless monitoring of pharmaceuticals through the cold chain.”

Earlier this month, CRN Wireless launched two 4G cellular alarm communicators through its AlarmPath division.

Get your new product listed in SSN

 - 
Wednesday, February 27, 2013

Got new product? Exhibiting at ISC West?

If so, you may submit your product for Security Systems News’ ISC West New Show Products section.

All companies exhibiting at the show can submit one product that is making its debut at ISC West 2013 in April, but companies that have more than one product division may submit one product for each division. That's like video and access--not different flavors of video, OK? Please attach a jpeg image of the product to the email.

The process is easy. Just send the following information, in the body of an email to Cath Daggett  cdaggett@securitysystemsnews.com

1.  Company name
2.  Company website
3.  Product name
4.  Three bullet points that describe your product, each 12 words or less
5. Company telephone number—only ONE please (to be published)
6. ISC West booth number (essential; you must be exhibiting at ISC West)
7.  Image of product ( JPEG file with a DPI of 300 or greater. No PDFs, please.)

The firm deadline is Wednesday, March 6. Space in the issue is limited, so submitting early ensures you a place in the section.

Questions? Call or email me or Cath.

 

ADT shares predicted to rise 20 percent

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Wednesday, February 27, 2013

An article in Barron’s has the financial media world abuzz because it predicts shares of The ADT Corp. “could climb by more than 20 percent over the next year.”

The article in the latest edition of the weekly financial newspaper owned by Dow Jones cites the push into home automation by the publicly traded ADT, which spun off from Tyco in September. ADT Pulse, introduced in 2010, is the driver of much of ADT’s growth, the article said.

Barron’s also indirectly suggests ADT could buy a rival like Vivint or that ADT itself could be acquired. The article refloats the rumor that AT&T could acquire ADT.

The article concludes: “It may be time for investors to pick up the smartphone and tap the ADT Pulse icon.”

Here’s some more details summarized by Reuters:
 

According to [Barrons], the Boca Raton, Florida-based company is already benefiting from a stronger housing market, rising demand for home healthcare services, and recent acquisitions, and commands 25 percent of the home alarm business and 14 percent of the small business segment.

… At the center of ADT's expansion effort is Pulse, a nearly 2-1/2 year old product that lets customers control settings remotely through devices such as smartphones and tablets.

While Pulse serves just 4 percent of ADT customers overall, the company in January said 19 percent of new customers use it.

ADT last month also set plans to quickly buy back $600 million of stock under an existing $2 billion repurchase program.

… It also said ADT could buy rivals, which are mainly owned by private equity firms such as Blackstone Group LP.  [which owns Vivint]

Based on recent transactions for security companies, ADT could fetch $59 per share in takeover, the newspaper said.

Shares of ADT closed yesterday at $46.57.

 

Back in the saddle: Gearing up for Vegas and ISC West

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Wednesday, February 20, 2013

ISC West can bring on sensory overload, from the din of the crowd to the glitzy displays to the lower-limb fatigue that comes with keeping yourself upright for eight hours at a stretch. Throw in the never-ending (and endlessly varying) spectacle that is Las Vegas and you have a lot to wrap your head around.

It’s quite a scene, especially for industry newcomers. That was the boat I was in last year for my Vegas initiation, which I’m glad to say resulted in little long-term damage. Aside from sleep deprivation blamed on three nights of frat house auditions in an adjacent hotel room, I emerged none the worse for wear.

Now it’s time to gear up again.

The emails with “ISC West” in the subject line are already flying and appointments are being penciled in. For those who haven’t taken a close look at the calendar lately, it might come as a surprise to learn that a return to the Sands is only seven weeks away. April will be here before you know it, with much to prepare for in the meantime.

With that in mind, I started an ISC planner yesterday. It’s quickly filling up. The educational sessions alone are enough to keep attendees focused squarely on the show instead of what might await after-hours. Here are a few sessions that drew my interest:

— “Staying Connected: Leveraging the Cloud and Mobile Applications for Enhanced Security.” Everything in the world, security included, is going mobile. If you don’t believe it, ask anyone with a smartphone—assuming they’ll look away from it long enough to answer you.

— “Counterfeit Products in the Security Industry: A Very Real Problem for All of Us.” If you don’t think they’re out there, you’re wrong. And like other knockoffs, they’re probably only going to get more difficult to detect.

— “60 Sites, 50 Miles and 5 Key Lessons Learned: How One School District Made the Move to IP Video Surveillance.” In the wake of Newtown this will be a hot-button issue, with an obvious upside for security interests.

— “The Great Debate: What to Use, What to Lose.” Technology is exploding, but "assets" deployed improperly can become expensive liabilities. Jay Hauhn of Tyco Integrated Security and Fredrik Nilsson of Axis Communications will help attendees learn from others’ mistakes and successes.

There are more than 60 educational sessions planned, starting on April 9 and running for three days. There also will be three rotations (April 10-12) of networking on the 200,000-square-foot show floor, so heels are strictly optional (for this writer, anyway). Other common-sense advice for first-timers includes not skipping breakfast—it’s easy to go through a day at the show and realize at 5 p.m. that you haven’t eaten anything—and bringing a water bottle to stay hydrated. For a complete schedule and more survival tips, go to www.iscwest.com.

Vivint in top 50 of Forbes’ top 100!

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Wednesday, February 20, 2013

Vivint made it into Forbes’ annual ranking of America's Most Promising Companies this year, marking the first time the Provo, Utah-based home automation/home security company was named to the exclusive list.

And with a ranking of 46 out of the 100 privately held companies listed, Vivint—which bills itself as the largest home automation services company in North America--actually made it into the top 50 of those successful businesses.

Revenue growth and hiring are two factors used to determine which companies make the list. Forbes lists Vivint’s revenues as $400 million and the number of its employees as 2,533.

Pivot3, an Austin, Texas-based provider of video surveillance storage solutions, is the other security company on this year’s list. Ranking #74, Pivot3 has $31 million in revenue and 92 employees, according to Forbes.

Vivint President Alex Dunn told Security Systems News, “It’s really nice to have third-party validation of what we're trying to accomplish … and it will help bring credibility to our strong management team and the company. But, in the end our success is not based on what awards we win and don’t win, but on how we take care of our customers and how we innovate around products and services [ensuring they’re] simple to use and affordable.”

Here’s more from Vivint’s news release on the Forbes’ list.
 

Vivint's inclusion on Forbes' list comes after a momentous year for the company, in which it crossed the threshold of $30 million in recurring monthly revenue--one of only three companies in its industry to achieve this milestone. Since 2007, the company has experienced a growth rate of 400 percent. Acquired in 2012 for more than $2 billion by Blackstone [http://www.securitysystemsnews.com/article/blackst..., Vivint was selected to the Forbes list for its growth (in both sales and hiring), the quality of its management team and its investors, product strength, margins, market size, and key strategic partnerships.

One metric never says it all. For the Most Promising list, Forbes strove for a holistic gauge of young, privately held companies, trying to pin down their trajectories by looking at a slew of variables. Over the course of six months, Forbes reviewed thousands of applications. Forbes turned to CB Insights, a Manhattan-based data research firm that specializes in assessing private companies, to refine the search. Their MOSAIC software scans 45,000 sources to measure a company's health. A new distribution deal, for example, marks a positive signal, while the loss of an executive is a negative. MOSAIC gathers those myriad signals into a final score that Forbes uses as an initial guide in producing the list. After verifying sales numbers, speaking with each company and debating their merits and blemishes, Forbes produces a final ranking.

To view the complete 2013 list of America's Most Promising Companies, visit www.forbes.com.

 

G4S Technology gets new EVP

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Wednesday, February 20, 2013

G4S’s integration business, G4S Technology, (formerly Adesta), has a new EVP: Sam Belbina. Belbina will be in charge of business development, marketing and communications, and strategic initiatives such as new markets and the expansion of National and Global Services business.

Belbina comes from Schneider Electric where he ran sales for the Schneider/Pelco video brand and the integrated security solutions business in the United States. “In this role, he captured and managed over $400M in business,” G4S said.  

Belbina will report to Bob Sommerfeld, president of G4S Technology.

SAFE Security expands into DIY, with help from Honeywell

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Wednesday, February 13, 2013

Wow! SAFE Security is really making news lately. First, it was acquired late last year by ICV Partners, a New York-based investment firm focused on lower middle-market companies.

Then, it announced earlier this month that it had just bought about 24,000 alarm monitoring accounts from Orem, Utah-based Pinnacle Security—a summer-model company the select assets of which Protection 1 recently purchased.

Now, SAFE announced today that it’s entering the DIY home security market by launching a new division, SAFE@home, that “allows homeowners to self install a Honeywell wireless security system with professional monitoring.”

Here’s more from a news release from the San Ramon, Calif.-based company, which has operations in 44 states:
 

SAFE Security, one of the nation’s largest security alarm companies has launched a new division, SAFE@home. This new division will enable a consumer to self install a wireless security system at their home with ease. This DIY home alarm system will include professional UL certified Five Diamond monitoring by SAFE Security and will not require a phone line. The home security system can be controlled remotely by a smartphone or tablet via Honeywell’s Total Connect. The system is available across the continental US.

“With an increased demand in the residential security market for a self installed alarm system coupled with increased technology that allows for a wireless security system to be setup in minutes, SAFE@home is well positioned to be a leader in the DIY security space,” said Paul Sargenti, SAFE’s President and CEO. “We’ve partnered with Honeywell to provide a state of the art wireless security system and will accommodate Wi-Fi for IP alarm communications. This will allow our customers to take advantage of being able to self-install their wireless security system. By enabling our customers to self install, they will save money by not requiring an alarm company to install the alarm system.”

Customers can select from 3 complete packages and add on additional hardware to best fit their needs.

I’ve reached out to Sargenti to learn more about all these developments. Look for more about SAFE Security on our site in the near future.

 

Martha talks to Mike Barnes: RMR growth rate, other metrics revealed

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Wednesday, February 13, 2013

I had a chance today to talk to Mike Barnes about last week's Barnes Buchanan Conference. Below are some highlights of our conversation.

Interested in more insight on RMR and related growth? Check out the April issue of SSN for the 3rd annual Special Report of the SSN/Barnes Associates Wholesale Monitoring study. The study will also be available online on www.securitysystemsnews.com, and featured in a future Thursday morning newswire

The SSN/Barnes Associates Wholesale Monitoring study tracks the number of accounts monitored by the wholesale monitoring segment. As Barnes says, "There has always been great clarity on the performance of the top players, which on a combined basis have an approximate 51 percent market share." The challenge has always been to determine what is happening with the many thousands of smaller alarm companies that comprise the other half of the industry—this survey sheds light on that question. This year the response rate was even greater, thanks in part to the CSAA Contract Monitoring Council, which is a new co-sponsor of the survey.

Martha: What's the Barnes outlook for 2013?

Mike: We are bullish on 2013.  Even with the economy still sputtering and some remaining challenges in the commercial segment, I think 2013 is likely to be better than most people are predicting.
 
Martha: What highlights can you share about the categories you generally hit on: growth, structure, operating metrics, market values?

Mike: The big surprise for 2012 was how much the industry grew RMR and related revenues. Our research indicates that these revenues grew by an astounding 8 percent. Quite a bit higher than expected. Overall industry revenues were flat, due to the decline in installation revenues. That is, installation revenues were down and RMR was up. This dynamic appears to be a combination of price shifting, where lower average-installation fees are exchanged for higher ongoing service charges, and continued shrinking revenues in the large commercial systems segment.

Martha: What was the most surprising metric this year?

Mike: By far the growth in industry RMR was the surprise metric. Additionally, it appears that this growth had a nice balance, with about half coming from higher average RMR per system, and the other half from a net increase in the number of systems.
 
Martha: Your bubble charts are always an interesting part of your Industry and Market Overview presentation. I heard there are now green bubbles on the bubble chart? What can you tell me about that? What new information do the new greeen bubbles bring to light?

Mike: Our bubble charts are a great way to graphically view acquisition activity. Each bubble denotes a transaction on a time-and-valuation multiple basis, with the size of the bubble indicating the amount of RMR involved. Basically you see three variables in a simple graphic. HIstorically, we have also added a fourth variable by shading the bubbles one of two colors to indicate the type of buyer, either an existing industry player or a new player buying a platform company. This illustrates how active each type of buyer is, and highlights the fact that new players entering the industry typically pay higher relative prices due to a combination of their selecting the better performers and paying a premium for their highly selective requirements. 

This year we introduced a third color (green) which reflected transactions where only accounts were sold. Take the recent sale of a block of accounts by Pinnacle to Monitronics: As one would expect, the pattern becomes clear that accounts and their associated RMR have a finite value and trade within a relatively tight range, which is, of course, supported by the activity in the dealer program market. It also highlights that fact that when the market trades security alarm companies above this range, it is typically because of the account-origination capability. That is, the ability of the company to originate new customer accounts and related RMR at a cost and volume that is accretive to value. 

It is often overlooked that when a company trades for a high multiple, say 45 times RMR, this is usually not an indication that the RMR sold was worth that amount.  Rather, it is probably the case that the existing account base was valued at something in the 30s as a multiple of RMR, and the difference is predominantly reflecting the value of the account generation engine. This helps bring better clarity to the valuations realized by Vivint and other higher growth companies, and ultimately help buyers and sellers have a more productive conversation when referencing market transactions in their negotiations.
 
Martha: Other than the "must attend" Barnes' Industry and Market Overview, were there any notable educational sessions or talks?

Mike: We were extremely proud of this year’s conference, both because we had both the right attendees and great content.  Our company presentations provided great insight into several players that are using new and innovative business models. Protect America is a great example. They are using a “direct to consumer” model that allows them to close the sale over the phone or internet, and to ship pre-programed and configured systems which are then installed by the consumer.  It was amazing to hear how successful and large the company has become. Our C-Suite Roundtable was also notable with 4 of the top executives of major companies, including ADT, discussing trends and issues associated with the industry. These segments, combined with ones focusing exclusively on the capital markets and the largest deals that occurred in 2012…and, of course our industry overview…really gave our attendees a great conference.

$7 billion bucks, not bad

 - 
Tuesday, February 12, 2013

I was talking to Capital One's Bill Polk today about some deals Capital One has closed on—stay tuned for stories on those later this week—and we started talking about the larger deals that happened in 2012.

This was a topic of conversation at the Barnes Buchanan Conference 2013, which took place last week Feb. 7-10, at the Breakers in Palm Beach. I normally go there directly from TechSec, which was Feb. 5&6 in Fort Lauderdale, but I had to miss it this year. I was sorry to miss the conference of course, but a BFF's milestone birthday party in Cincinnati won out.  More on TechSec and Barnes also this week.

So Polk was saying that the larger deals this year, such as Vivint and Securitas Direct, ADT (there were like five of them) totalled up, brought $7 billion dollars into the security industry in 2012. "We've never seen $7 billion come into the industry over a 12-month period before," Polk said.

"What's going on here? The story is that the size and growth in this industry has reached the point where sophisticated capital structured [deals] are finding their way to the top of the house," Polk said.

He said the Interface Security deal was particularly interesting. (Capital One worked with Imperial Capital on that deal.) As Imperial Capital's John Mack pointed out when I reported that story a couple of weeks ago, Polk said, "Normally the bond market likes much larger deals, but the Interface deal was oversubscribed [because they liked the company.]"

Now, bond market deals are not for everyone in the security industry. Not even close.

The "traditional lender, such as Capital One,will continue to play a really important role," Polk said. Instead, the past year's bond market deals signify that the security industry is maturing.

MIlestones all around.

 

Deadly shooting follows low-priority alarm in Colorado Springs

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Wednesday, February 6, 2013

It was what the Colorado Springs Police Department calls a Priority Three alarm: A minor incident “requiring a response that is dispatched based on the availability of patrol units.” What followed was the nightmare scenario dreaded by police, alarm companies and alarm users alike.

According to CSPD spokeswoman Barbara Miller, a security alarm was triggered at the home of David Dunlap and Whitney Butler at 11:10 a.m. on Jan. 14. The alarm company, ADT, then called Dunlap’s cellphone and left a message for him to call back. At 11:18, ADT called police to notify them about the alarm.

Based on department policy to reduce the burden of false alarms in the city, officers were not dispatched.

“We had no units available,” Miller told Security Systems News. “We do priority calls. … If there is a ‘crime in progress’ call [with a life-threatening situation], those are first. If it’s a human-activated alarm or a panic alarm, that’s also a high priority. We would respond immediately to that.”

At 11:25, Dunlap returned ADT’s call and was informed about the alarm, but he did not call police, Miller said. Thirty-five minutes later, CSPD responded to a report of shots fired at the couple’s Bassett Drive address. Police say Dunlap and Whitney were killed as they entered their home by 17-year-old Macyo January, who was arrested three days later and charged with first-degree murder.

Miller said the incident calls attention to a common and potentially dangerous oversight by alarm users: If an alarm is activated, they should not assume there will be an immediate response from law enforcement.

“Many times, the alarm company will notify the owner that their house alarm has been activated. If that person returns to his or her home to check on the alarm, they must be extremely cautious and vigilant,” she said. “For instance, if they notice a front door that might be slightly opened or a broken window, or see a suspicious vehicle parked outside their home, we would strongly recommend that they call 911 so an officer can check for a possible burglary in progress or burglary that just occurred.”

Miller said that Colorado Springs police will respond to any activation when there is evidence that a crime has been committed—“i.e., a responsible party is on scene and has told the alarm company there is a broken window at the residence or business. Another example would be an alarm service indicates they have video surveillance inside of the business and they can see someone inside of the location.”

Ron Walters, director of the Security Industry Alarm Coalition, told SSN that virtually all police agencies, even those with scaled-back response policies, handle human-activated alarms “at a fairly high priority.” That goes for video intrusion alarms as well, but as Walters pointed out, there is only so much a security company can do.

“Alarms are designed as a deterrent and cannot stop a crime from happening,” he said. “The best deterrent remains the threat of response by a well-trained and armed police official.”

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