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Mainers go nationwide

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Friday, April 25, 2008
I was determined to find a good YouTube video for today, since it's Friday and everyone likes a little mid-afternoon video on Friday, and I just couldn't resist showing a little love to a Maine company, Guardcom, that's trying to go national with a wireless alarm system that's self-installed. Here's the video pitch: More than a few things strike me here. First, I've got to think false alarms are a nightmare with this service, as not only are they just using simple motion detectors, but it sounds like they're not using enhanced call verification ("We'll call you to let you know the police have been dispatched!") and arming and disarming via keyfob is great in theory, but I bet anyone with kids knows that keyfobs are meant to be played with. Still, this goes to show you the type of high-margin alarm company you can put together with products from Honeywell and Alarm.com (check out the remote arm/disarm demonstration here - it's kind of cool). Think about it: You've got no installation staff, no outside service calls, and you can third-party the monitoring. So, essentially, all you'd need is a warehouse in nowhere Maine and a couple people to take orders and ship out systems, plus a marketing budget. Seems like a good business model to me.

United Protection to buy mystery firm

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Thursday, April 24, 2008
United Protection is a guarding/integration firm trying to make some noise in western Canada and has been slowly moving toward the U.S. market, apparently by starting with the guarding business. They hired former CEO of Rentokil Initial Canada Don Allan in 2006, struck a deal with Convergint for some high-level integration work last year, and now are making their big play: They've signed a purchase agreement for a company in the southern United States doing more than $100 million annually. Which one? They're not saying yet. It's a mystery. No wonder people aren't in love with the guarding business here in the States, though. Look at the financials on this deal: [T]he Company has entered into a share purchase agreement to acquire a 75% interest in a private security services company based in the Southern United States (the "Target"). The consideration to be paid for the interest in the Target will consist of: approximately USD $15.6 million to be paid in cash; approximately USD $3.1 million in the form of a convertible vendor financing note; the assumption of approximately USD $7.2 million in indebtedness; and other liabilities which amounts will be confirmed prior to closing. Under the terms of the agreement, United Protection also has a five-year option to acquire the remaining 25% interest at a defined valuation multiple. The acquisition, which is anticipated to close on or before May 30, 2008, is expected to be funded through a new equity financing by United Protection. During the 2007 fiscal year, United Protection had revenues of approximately $22.5 million, net income of $0.6 million and earnings before interest, taxes, depreciation and amortization ("EBITDA") of $1.2 million. During the same period, the Target had revenues of approximately $98.7 million, net income of $4.8 million and an EBITDA of $9.0 million. United Protection is currently in the process of conducting due diligence on the Target's financials. So, you can get 75 percent of $100 million in guarding revenue for less than $20 million and the assumption of $7 million in debt? There's something I'm missing. Net income of $4.8 million should cost more than that, it seems to me, but I'm new to the world of guarding acquisitions.

Contractually overloaded

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Wednesday, April 23, 2008
Here's an article that follows one woman's experience in contract hell. Her experience is specifically about getting unknowingly roped into a contract with her satellite television provider, but could easily be applied to alarm monitoring contracts. From a consumer point of view I can completely understand her frustration (I just changed cell phone providers, which was quite an ordeal). And, apparently, so can the author of this article. Here's my favorite paragraph: Customer service contracts have become the bane of our consumerhood, a modern form of indentured servitude, a spiral of preset spending from which breaking free is almost impossible. We wince and sign, lured by equipment discounts or other come-ons, all with a sense that we'll regret it later. However, from the company's standpoint, the need for contracts is unquestionable, particularly in the alarm industry where RMR is the number that counts. I monitor several industry listserv's and regularly read posts from business owners about their troubles with contracts: how to write them in a way that's legally binding and inclusive, but at the same time easily understood by the consumer. I don't often read about the enforcement of contracts, so I don't have a good perspective on how much of an issue it is, but I imagine it's not something that's in the 'likes' column for many business owners. I think it's safe to say that contracts are nobody's friend, except maybe your lawyers.

Bloomberg reports Petards considering sale

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Tuesday, April 22, 2008
Bloomberg is reporting that Petards, a U.K.-based IP video firm, is considering a sale or major refinancing. Negotiations also include the possible sale of some units, Sunbury, England-based Petards said today in a statement distributed by the Regulatory News Service. "Discussions are at various stages of advancement and there can be no certainty that any of the approaches will lead to an offer being made,'' Petards said in the statement. The surveillance systems maker, which has posted losses for eight straight years, sold its U.K. software business to BAE Systems Plc in January. The company said it would use the 2.5 million pounds from the sale to pay down debt. Petards's 6.8 million pounds of current liabilities at the end of June exceeded its current assets of 6.3 million pounds, leaving Petards with no working capital, which companies use to maintain operations. Who'd be interested in Petards? Well, any of the major brands who might be a little late to the IP ballgame, I guess, but most of those have already caught up. This is one company that might just be left on the vine to wither. Wednesday morning, additional information: This morning I received the statement from the Petards board: The Board of Petards announces that it is in discussions with a number of parties concerning the potential sale of the Company and/or one of its divisions or, alternatively, a refinancing of the business by a third party. Such discussions may or may not lead to an offer being made for the Company or the acquisition of a division of the Company or a refinancing of the business. The Board of Petards, which is being advised by Collins Stewart Europe Limited, wishes to stress that the approaches and the resulting discussions are at varying stages of advancement and there can be no certainty that any of the approaches will lead to an offer being made for the Company or the acquisition of any of its divisions or a refinancing of the business. A further announcement will be made as and when appropriate. That's pretty classic. So, to summarize, Petards is in discussions with a number of parties about either selling the company, selling a part of the company, or not selling the company and refinancing the company with a third party. However, there's no certainty any of those things will happen. No wonder the stock went up!

Pumping up the parking police

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Monday, April 21, 2008
Ooh, I hate those meter reader guys. You know, the ones who spend their days driving up and down city streets in their golf cart-size trucks trying to bust people for running to the bank without depositing adequate change in the meter (can you tell I've been busted a few times?). Well, perhaps I would've been able to find a parking space in the bank lot if they had employed this company. Basically, the company uses security guards to monitor parking lots via video to ensure that people who are parking there are indeed conducting business at the respective owner's place of business. My take on this article is two-fold: One, yes, it's a way to keep people from parking in private lots where they aren't doing business and, two, it keeps those security guards from dying of boredom. Based on the article you can tell these guards are excited to have something to do, too. The example they cite is about a guy who parked in a bank parking lot and then didn't go into the bank (!!).Although the driver insisted he had done business in the bank, Houle said he had the whole thing on camera. "(He) came back 40 minutes after (parking) without any proof that he went into the bank," Houle said. The guards booted his car and charged him $75 to take it off. Apparently, it's working and freed up a number of available parking spots for bank users, but really, $75? That's a wee bit steep, in my opinion, but I guess somebody's gotta pay for those meter maids, I mean security guards.

IBM gets a feather for its cap

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Monday, April 21, 2008
Normally I don't pay much attention to the industry awards given out by Frost & Sullivan. Frankly, there are too many to keep track of and if I covered them all, I wouldn't have much room for anything else. However, I must admit I'm struck by the announcement today that IBM has been named the 2008 North American Video Surveillance Software Company of the Year. Not that IBM isn't a great company capable of executing some great software for the physical security market. It's just that I've really heard almost nothing about them since they announced last year their entry into the physical market (for the second time), and all their acquisitions and noise lately has been focused on the IT security market. (Note in that link the reference to IBM's plans to spend $1.5 billion on IT security this year.) Here's some explanation: Frost & Sullivan identified the recipient of this award based on the following criteria: revenue and market-share growth; proof of success executing a restructuring strategy; new market penetration; marketing, promotion, and visibility of the company through various media; evidence of success through strategy innovation; technological innovation and leadership; increased name recognition; and improvement in customer satisfaction and loyalty levels. So, I wouldn't have thought they'd created much revenue or market share yet. I guess they restructured and entered a new market, but I haven't been impressed by their visibility in the market (they were on the "other" ISC West floor) and I'm not sure how you could increase IBM's name recognition. Plus, I haven't heard a single integrator I've talked with mention them. I guess I'm talking to the wrong people? Or Frost & Sullivan are just impressed by the three-letter reputation? If you're using IBM software and are impressed, let me know.

The logical result of IP cameras going mainstream

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Monday, April 21, 2008
I'm surprised this is the first I've heard of an Internet campaign to recruit people to monitor IP cameras from the comforts of their own homes. It's a group called Virtual Vigilance, part of American Border Patrol, and they're placing IP cameras on the border with Mexico that can be monitored over the 'Net, provided you've got a user name and password. The idea is that people can sign up to monitor individual cameras, so that each camera is monitored 24/7, and volunteers can contact border guards if they see something suspicious. These guys have at least done a little homework: To maximize vigilance, viewing time is limited to 30 minutes, after which another volunteer takes over. So, for each camera, the group needs, say, 12 rotating volunteers? Or as many as 48 if each person agrees to only take one shift a day? And each of those volunteers needs to commit to 365 days of vigilance? That adds up to a lot of people in a hurry if you're trying to cover any serious portion of the border. We're talking 2,000 miles of border here. More power to them, I guess, but I can see this sort of thing possibly becoming a bit in vogue. Graffiti problem at the school? Get some volunteer parents to monitor cameras. Worried about sex offenders in your community? Set up cameras near day care centers and get volunteers to monitor them for signs the bad guys are in the area. Hey, it's better than everyone just sitting home and watching soap operas, right?

Flir looks for da Vinci's lost work

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Sunday, April 20, 2008
Anyone watching 60 Minutes tonight saw a Flir thermal camera being instrumental in a search for Leonardo da Vinci's lost masterpiece, "The Battle of Anghiari," a mural that may reside behind a wall covered by a another painting. An art detective is trying to use the heat signature of the pigments da Vinci favored to prove it's there. Pretty neat. View the preview here.

Earthquake!

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Friday, April 18, 2008
Sorry about my use of exclamation points lately. I hate to yell at you, but I don't think you can write the word earthquake without an exclamation point. They're kind of exclamatory events. Anyway, an earthquake rumbled through Indiana this morning and the guys at Exacq, of course, got some documentation on video. It's not exactly movie-of-the-week exciting, but interesting nonetheless. Check it out here.

Sweat goes high tech

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Thursday, April 17, 2008
Here's a little blurb about a Swiss company working to integrate "analysis modules for biochemical sensing" into textiles for health monitoring. It made me wonder how prevalent true health monitoring was in the industry and the logistics of central stations to incorporate it into their offerings? Granted, this isn't your average PERS monitoring, it involves the analysis of sweat, blood (and tears?). Per the company's Web site: This allows for the first time the monitoring of body fluids via sensors distributed on a textile substrate and performing biochemical measurements. I imagine the development of the specialty "sensing textiles" would be fairly complex, but I wonder about the requirements for monitoring? Could companies that already specialize in PERS and have medically trained operators easily incorporate this high level of medical monitoring into their systems? It's obviously a new technology, but the concept seems plausible to me. And frankly, I'm curious what these "sensing textiles" will look like. I have a hard time believing these techie guys will have even a remote sense of fashion (people have to wear these things, after all).

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