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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.

 

$7 billion bucks, not bad

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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.”

Pinnacle Security fined more than $500,000

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Monday, February 4, 2013

Summer-model Pinnacle Security is getting a fresh start after traditional-model home security giant Protection 1 recently purchased select assets from the company.

The deal has great potential, according to an alarm company owner who has married both models.

But it appears that problems from Pinnacle’s past continue to dog it. According to news reports, the Utah-based company now has to pay $525,000 as the result of a lawsuit filed by California’s Contra Costa County, charging Pinnacle with deceptive business practices.

It's not the first time Pinnacle has been sued over such issues.

Over the years the company has been accused in a number of states of deceptive sales practices. Last fall, for example, Pinnacle agreed to pay a $1 million fine in a settlement with the state of Illinois for such alleged violations as “slamming” customers and even hiring felons as sales reps.

According to a news report, the following information was released from the office of Contra Costa County District Attorney Mark A. Peterson. It said that the civil judgment against Pinnacle, in addition to the payment of penalties and costs:

 

o    Requires Pinnacle’s sales representatives to refrain from making false and misleading statements during the door- to-door sales presentations.
o    Prohibits Pinnacle sales representatives from telling consumers that they will get free or discounted products or services if they allow a Pinnacle sign to be placed in their yard.
o    Prohibits Pinnacle sales representatives from telling consumers that sales representatives are engaging in “seed marketing, advertising, marketing, or increasing Pinnacle’s visibility in the neighborhood”.
o    Requires that Pinnacle sales representatives comply with section 17500.3 of the Business and Professions Code by immediately verbally identifying themselves, who they work for, and what they are selling.
o    Requires that Pinnacle use contracts that comply with California’s Unruh Act and federal regulation Z pertaining to retail installment contracts by disclosing, among other things, the total price of the alarm monitoring service for the initial contract term of years.
o    Requires that Pinnacle use Spanish language contracts for customers to whom the sales presentation was made primarily in Spanish.
o    Requires that whenever a sale is made to a customer who already has monitoring equipment installed by another monitoring service provider, that Pinnacle shall not remove that customer’s existing monitoring equipment until such time as the three-day cancellation period (applicable to door-to-door residential sales) has expired.
o    Puts limits on the amount of contract termination fees that can be charged to customers.
o    Requires the payment of restitution to certain customers; and
o    Requires that Pinnacle adopt specified provisions to monitor the future conduct of their sales representatives.

 

Q1 sales, profits up for ADT

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Wednesday, January 30, 2013

Sales of Pulse are up more than 6 percent and recurring revenue up more than 5 percent, The ADT Corp reported today as it released its results from its first quarter ending Dec. 28. The home security/home automation giant also said it added 257,000 new customers and has 6.4 million customer accounts.

When ADT on Sept. 28 became an independent, publicly traded company after spinning off from Tyco International, CEO Naren Gursahaney told me that it was not "a moonshot” for ADT’s residential penetration rate to rise from around the industry standard of about 20 percent to 40 percent.

Of course, it’s too soon to tell if ADT will succeed in that goal, but the company is performing well according to the report it released on Jan. 30. Here’s a synopsis from a Reuters story on the earnings results:
 

Home security services company ADT Corp reported a higher quarterly profit on Wednesday and announced a $600 million accelerated share repurchase.

The company, formerly a part of Tyco, said net earnings had risen 12.9 percent to $105 million, or 44 cents per share, from $93 million, or 39 cents per share, a year earlier.

Analysts on average were expecting a profit of 43 cents per share, according to Thomson Reuters I/B/E/S.

Sales rose 1.8 percent to $809 million, with recurring revenue from existing customers accounting for 92 percent of the total and increasing 5.1 percent from a year earlier.

The Boca Raton, Florida-based company, which provides security monitoring services to homes and small businesses in North America, said it still expected a rise of 4.9 percent to 5.2 percent in recurring revenue in fiscal 2013.

Here’s also some of what ADT had to say in its report:

Naren Gursahaney, ADT’s Chief Executive Officer, said … “Looking ahead to the balance of the year we will continue to focus on our ultimate objective of creating long-term value for our shareholders by reinvesting in our business to drive profitable growth, and returning excess cash to our shareholders.”

Recurring revenue, which made up 92% of total revenue in the quarter, was up 5.1%. Recurring revenue growth was driven by a 4.7% increase in ending average revenue per customer, which rose to $39.27, and 0.5% net growth in ending customer accounts. Non-recurring revenue declined 25.3% as the company’s mix of newly installed systems continues to shift toward more ADT-owned systems, increasing deferred revenue and reducing current period installation revenue. Total revenue of $809 million increased 1.8%, compared to the first quarter of 2012. Attrition was flat sequentially at 13.8%. ADT added 257,000 new customers and closed the quarter with 6.4 million customer accounts.

EBITDA before special items was $417 million, 6.1% higher than the first quarter of the prior year, and EBITDA margin before special items was 51.5%, a 210 basis point improvement. The margin expansion was mainly due to the favorable impact from the mix shift to more ADT-owned systems and was also aided by cost control initiatives that helped to offset the expense impact of dis-synergies caused by the separation from the Tyco commercial business and Hurricane Sandy.

 

Hot button: Who’s getting into mobile PERS now?

 - 
Wednesday, January 30, 2013

The world of mobile PERS and remote health monitoring continues to expand.

At the Consumer Electronics Show in Las Vegas earlier this month, ADT announced that it was getting into the game by teaming with Ideal Life, a Toronto-based company whose health monitoring and information technology will be integrated with ADT Pulse to provide “proactive prevention” for people managing chronic health conditions. The system uses digital, wireless, secure two-way communicators to measure and relay information about glucose levels, blood pressure, body weight, oxygen saturation and heart rate.

Royal Philips Electronics, which has long been a player in personal emergency response systems, also made news at CES by introducing Lifeline GoSafe. The mobile PERS system combines the company’s AutoAlert fall-detection capability with two-way cell communication and up to seven user-location technologies.

“Our intention is that GoSafe will provide users with the confidence to get back to activities or go to places they have scaled back on, knowing that help is easily accessible,” Rob Goudswaard, senior director of product and service programs for Philips Home Monitoring, said in a prepared statement.

The need to provide more protection for seniors as they maintain their independence isn’t lost on Mace Security International, which is “looking hard” at getting into the mobile PERS space, CEO and President John McCann told SSN last week.

“I think you’re going to see a shift from just home security to security 24/7,” McCann said. “As you look at that shift in the world, and I use my dear sweet mother as an example, I’m a little more worried when she’s on the road than when she’s at home. Therefore we’re looking at how do we increase that fence around her so she’s safe, so loved ones feel that the person they’re worried about is safe.”

Security dealers who want to take advantage of this growing market might want to think about attending the second annual PERS Summit, which will be held Sept. 10-12 in Park City, Utah. Last year’s inaugural session brought together more than 100 dealers, service providers and manufacturers’ reps for three days of networking. To learn more, go to www.perssummit.com.

New jobs for Tyco’s Hauhn, Monaco

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Wednesday, January 30, 2013

Two Tyco IS executives have new/expanded roles, according to an internal Tyco announcement. 

Effective this week, Jay Hauhn is now VP, Product Management and Industry Relations; Hank Monaco is now VP, Marketing.

As VP, Product Management and Industry Relations, Hauhn will oversee product technology and innovation as well as industry and government relations. He will lead product and service solution development and engineering, and is charged with the development and implementation of product strategy. Hauhn will also be in charge of the technology roadmap for strategic product vision. Hauhn, who has served as Tyco's VP, Industry Relations, will work continue to work with industry associations and Tyco’s Government Relations office.

As VP, Marketing for Tyco IS, Monaco will lead advertising, branding, communications, interactive marketing, strategy, business development and product marketing. Monaco will also identify new market opportunities and drive the development of new value-added products and services.  Most recently, Monaco was VP Commercial Customer Marketing. The company said he “played a key role in leading the development and implementation of vertical market solutions roadmap … [and] developed the commercial business first ‘customer experience platform and attrition / price-based churn models,’ which enabled the business to prioritize initiatives to improve customer retention.”

 

ESX one of the fastest-growing trade shows in U.S.

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Wednesday, January 23, 2013

It should come as no surprise to anyone who has attended ESX in the past couple of years that it’s one of the fastest-growing trade shows in the country.

There was confirmation of that recently from Trade Show Executive magazine, which named the Electronic Security Expo one of the publication’s Fastest 50 winners for audience growth. Attendance at ESX grew 15.1 percent from the 2010 event in Pittsburgh to the 2011 event in Charlotte, N.C., easily outpacing average trade-show growth of 1.9 percent across a wide spectrum of industries, according to Darlene Gudea, president of the Trade Show Executive Media Group.

“At a time when most trade shows were battling the Great Recession and could barely maintain attendance levels of the past, along came the Electronic Security Expo, achieving a dramatic 15 percent jump in attendance,” Gudea said in a prepared statement.

The performance lifted ESX to 45th on the magazine’s list, “a success story that others can emulate and … a tribute to [the show’s] organizers,” Gudea said.

George De Marco, ESX chairman, said the growth is based on a winning formula: enhancing the show floor each year, adding to the education program and providing an array of networking events for integration and monitoring companies.

“We remain focused on executing our strategy of providing a dynamic ecosystem for security professionals to experience at ESX, helping them develop new partnerships, uncover new business opportunities and connect with colleagues,” De Marco said in the statement.

ESX moved to Nashville in 2012—hello, Tootsie’s—and it will be held there again in 2013, with events running from June 17-21 at the new Music City Center. For more on what to expect, go to www.esxweb.com.

Sprinkler standoff good argument for tax incentives

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Wednesday, January 23, 2013

Businesses v. Fire Sprinklers. That could be the headline of a story this week in the Chicago Tribune about a fire sprinkler requirement for businesses in the village of Westmont, Ill.

It appears businesses and the village are at odds over such basic fire protection, but they needn’t be if only Congress would stop stalling and pass the Fire Sprinkler Incentive Act, or FSIA. The act would provide tax incentives that make sprinklers more affordable.

The story says that the village requires businesses to install fire sprinklers but has put that safety requirement on hold because businesses say they can’t afford to add sprinklers. Here’s what the story had to say:
 

The village began a moratorium on the sprinkler requirement in 2010 for three years, citing that it had deterred businesses from locating in Westmont. The moratorium expires in spring and the board plans to discuss the issue at a meeting in February.

Trustee Ellen Emery said the moratorium was intended, in part, to allow property owners more time to become compliant. But many businesses have not, she said, adding that building owners, not lessees, should be responsible for installing the fire sprinkler systems.

Still, trustees said many landlords are requesting tenants install the systems.

"If a building is not up to code, a new business isn't going to want to invest their life savings into it," said Emery. "There have been many cases where businesses decided not to open up in town after learning they would have to pay for the installation of the sprinkler system."

Emery says a strip mall on the south end of town is almost completely vacant because the owner doesn't want to pay for the installation of a sprinkler system. Fire officials also told trustees that 65 businesses have not installed a mandatory wireless fire alarm system while 550 buildings have. Of those not in compliance, about 55 are in the downtown area, they said.

The fire code issue comes as the village is considering enacting a tax increment financing (TIF) district on the south end of the community and possibly in the downtown to help revitalize the areas.

A TIF is one answer that communities like Westmont could employ to resolve this issue. But that approach is piecemeal when compared to the Fire Sprinkler Incentive Act.

After 100 people were killed in The Station nightclub fire in West Warwick, R.I. in 2003, coalition of groups, including firefighters, fire sprinkler manufacturers and fire and life safety groups have been lobbying Congress to pass FSIA.

According to the latest version, introduced in the House of Representatives in 2011, the act would amend the Internal Revenue Code “to allow: (1) 100% expensing in a current taxable year of the cost of an automated fire sprinkler system, as defined by this Act; and (2) accelerated depreciation (i.e., a 15-year recovery period) of such an automated fire sprinkler system that is installed in a building where the floor of any occupiable story is greater than 75 feet above the lowest level of fire department vehicle access.”

 

Rapid acquisition

 - 
Wednesday, January 23, 2013

Rapid Security Solutions of Sarasota, Fla., is growing rapidly following an acquisition, announced today, of Armenti Construction and Access Control, Inc, of Lake Worth, Fla.

I had a chance to speak to Steve Paley, president and COO of Rapid, (and also president of the new Florida chapter of ESA) this afternoon.

Paley said the deal doubles the size of his company, bringing 10 new employees and a number of accounts, notably with gated communities in the Palm Beach county area. "The former owners (Bill and Danielle Armenti) will stay on for the transition." New staff members include 6 technicians and 4 sales and office personnel. "They're outstanding. We're happy to have them join our team," Paley said.

"It's a great location; we needed to be there," Paley said. Armenti's work involved installing lots of security gates and "about 5 percent video [at the communities]," Paley said.

Rapid's plan is to go in and "on top of the gate work, we lay in video and access control ... it's a huge opportunity to gain a greater share of their wallet."

Rapid now has two offices: its home office in Sarasota and now one in Lake Worth. It has warehouses and staff members in Tampa, Orlando and Cape Coral, but Paley said the company will have brick and mortar in all locations--and plans to "double in size within two to three years."

The growth will come from acquisitions and organic growth. Paley said Rapid is "fortunate to have good financial partners that believe in our strategic plan."

Steve Rubin of Davis Mergers and Acquisitions assisted Armenti in the deal.

Look for more on this deal later this week.

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