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Rapid acquisition

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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.

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.

Alarm industry mourns Michael Kallio of Mace CS

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Wednesday, January 16, 2013

Mace Central Station announced late Tuesday that Michael Kallio, the company’s vice president of business development, died Jan. 10 after a battle with cancer.

Kallio was a 26-year employee of Mace CS in Anaheim, Calif., and was a member of the California Alarm Association.

“Michael was a dedicated, loyal manager and he helped guide the company to be one of the most respected central stations in California and the West,” said Michael Joseph, vice president and general manager of Mace CS, in a prepared statement.

Mace Security International announced that it will create the Michael Kallio Spirit Award and will provide matching funds for a scholarship endowment in his honor. The endowment will help deserving students with their college educations.

Kallio was promoted to vice president of business development at Mace CS in April 2012. Previously, he was manager of business development and operations manager. He was also a real estate agent at Joshua Realty & Loan in Orange County, according to his LinkedIn profile.

ADT performing well

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Wednesday, January 16, 2013

Since ADT spun off from Tyco International Sept. 28 and began trading on the New York Stock Exchange, the news about its performance has been upbeat. And earlier this week, according to news reports, Credit Suisse Group reaffirmed its outperform rating of the The ADT Corp. and raised its target price from $50 to $54. It cited ADT mergers and acquisitions as a factor.

Here’s more from Credit Suisse’s Jan. 14 assessment of ADT:
 

Some investors think they "missed" the chance to own ADT. We disagree, and see upside to the mid/high $50's over the next 12 months. TP raised to $54 (from $50). We think ADT's M&A spend will exceed their budgeted $150mn in 2013 and drive revenue and earnings growth above current market expectations. The fragmented security monitoring industry is filled with potential targets for ADT and given most industry competitors operate near identical business models, most M&A should offer significant cost synergies and earnings accretion. An additional half turn of EBITDA leverage to ADT's current targets would give ADT $700mn to spend on M&A; this could mean $175m in incremental EBITDA before synergies (10%+ accretive).

In trading yesterday, ADT closed at $47.25. Its 52-week range went from $35.38 to $47.50.

 

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A NICE Verint deal?

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Tuesday, January 15, 2013

Will there be a very nice Verint NICE deal soon? That's what the rumor mill says.

Rueters reported yesterday that Verint Systems stock was up more than 7 percent and NICE shares were up 6.7 percent on reports from Globes, an Israeli financial site, that said Nice Systems is talking to Verint about buying it for $1.5 billion.

It's said to be a cash and stock offer that would "represent a 19 percent premium on its market cap of $1.26 billiion," according to Rueters.

I called NICE and Verint for comment and heard back from Erik Snider, NICE director of corporate communications. Snider said via email, "As policy, NICE does not comment on such rumors."

This possible acquisition comes as Verint is about to become an independent company, something I reported on last fall. Here's that story. 

I spoke to Michael McManus of Imperial Capital, who noted that if this deal happens it's not necessarily a "security thematic" play, as both NICE and Verint have non-security divisions. "They're much more than two VMS companies," he said.

The fact that Verint is scheduled next month to become independent from its former owner and former messy capital capital structure is important, McManus noted. (Take a look at the link above to learn about some of the compllications Verint had with its parent company.) 

Once Verint does become independent, it will be the first time that that it "would be separated from its past troubles—the first time in recent memory that it would be possible [for someone to acquire Verint] in a clean deal," McManus said.

McManus speculated that NICE may want to make a preemptive offer just as Verint is about to become public and "before a U.S.-based interloper" makes on offer for Verint.

I also have a call into  Verint, no word yet.

Stay tuned.

 

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OV signs Panasonic, does R&D gov't work

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Monday, January 14, 2013

Make it eight deals with high-profile video providers for ObjectVideo. The video analytics provider on Jan. 9 announced it had signed a global patent licensing program with Panasonic.

Panasonic approached OV last year,  Raul Fernadez, chairman of Object Video, told me. OV is in discussions with six other manufacturers, he said.

With many of the biggest names in video surveillance now signed on with licensing agreements, will OV turn its attention away from its licensing program?

Yes and no, Fernandez said. OV is involved with other revenue-generating divisions, notably some R&D work with federal government clients, but licensing will continue to be an important business. There are new player in the video world all the time, Fernandez noted. And if OV lets up on its enforcement of patent infringement and licensing policies, current licensees would potentially be put at a disadvantage, he said.

However, Fernandez anticipates there will be less litigation involved in future licensing deals with video providers.

Aside from the licensing stuff, Fernandez wanted to talk about some software and services work OV is doing with "DOD and intelligence community sponsors … working on next-generation challenges for indexing, searching and retrieving images.”

It’s the kind of government-sponsored R&D work that OV did more than a decade ago that led to today’s mainstream analytic technologies (object tracking, object class, tripwire), Fernandez said.

The work OV is doing today with the government involves “a lot of indexing, image segmentation … taking images and crossmatching with large databases to geolocate images.”

Fernandez said it this research will propel “next generation innovations” for its government client, OV and the security industry. 

ADT adding remote health monitoring to Pulse

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Wednesday, January 9, 2013

ADT is getting into the health monitoring game.

The company announced this week at the Consumer Electronics Show in Las Vegas that it has teamed with Toronto-based Ideal Life to offer at-home and mobile health management services. ADT will integrate Ideal Life’s health monitoring and information technology into ADT Pulse, which gives customers remote access to home automation and security features.

Ideal Life bills its monitoring system as “proactive prevention” for people managing chronic conditions such as congestive health failure, hypertension, diabetes, asthma or obesity. The system utilizes digital, wireless, secure two-way communication devices to measure and relay information about glucose levels, blood pressure, body weight, oxygen saturation and heart rate.

“Ideal Life’s solutions empower consumers by educating them on the status of their conditions as well as the advantages of prevention,” Don Boerema, ADT’s chief corporate development officer, said in a prepared statement. “We look forward to working with their team to offer these valuable new services to our customers.”

Other monitoring companies have been into remote health management for a while, so it will be interesting to see what kind of traction ADT gets and how soon it will have an impact. But given the company’s size and marketing power, its push into the field will be hard to ignore.

Burglar alarm companies top chart when it comes to complaints, Utah BBB says

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Wednesday, January 9, 2013

For the third consecutive year, burglar alarm companies ranked first on the Better Business Bureau of Utah’s Top 10 list of the industries that generated the most complaints, according to a recent report by The Salt Lake Tribune.

There was a silver lining for burglar alarm companies in that unflattering ranking. Their resolution rate for the complaints increased—to 97 percent, according to the report.

Here’s more from the Jan. 4 story:
 

The Better Business Bureau of Utah has released its Top 10 list of the industries that generated the most complaints last year, with burglar alarm companies once again topping the chart.

The BBB said it received a total of 16,144 complaints in 2012 — down 5 percent from 2011 — and resolved nearly 77 percent of the cases, while the number of consumers accessing its reviews of businesses was up nearly 15 percent.

Among the industries on the BBB's Top 10 complaints list were computer, hardware, software and services.

… In 2012, for the third year in a row, burglar alarm companies drew the most complaints, with 1,825. Although the resolution rate for alarm companies improved, the number of complaints rose by more than 61 percent. Nearly 97 percent of the complaints were resolved.

Complaints against alarm companies usually involve sales issues, billing and contract renewal.

The second-highest number of complaints, 380, were logged against loan mortgage audits, or companies that promise to examine payments to make sure the amount is applied correctly.

Other industries that made the BBB’s list, in order of the number of complaints, were:

• Health and medical products, primarily those making promises about weight loss, with trial offers and hidden monthly fees

• Training program companies, such as firms offering instructions on how to start a business or make money on the Internet.

 

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Survey gives integrators insight into end user' budgets

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Wednesday, January 9, 2013

End user security budgets were up in 2012 compared to 2011, at least in the gaming vertical, according to a not-yet-released survey of nearly 200 Security Director News readers, conducted by IMS Research this summer.

What about end user budgets in other vertical markets? Read on. Below are some more specifics on what IMS learned about end user budgets and what this information may mean for integrators, but there will be much more information presented by IMS’ Will Rhodes at TechSec 2013, a new and emerging technology conference, jointly sponsored by Security Director News and Security Systems News.   

Want to attend? Click here to register   and here to find out more about the Feb. 5&6 conference that will take place in Ft. Lauderdale, Fla.

Back to the survey, Will and I had a conference call the other day about his TechSec presentation. Here is a small sample of the questions I had for him—and his answers:

ME: How did the results from casino and gaming security directors compare with other vertical markets?
WR: The majority of casino and gaming respondents (51 percent) suggested their budget would increase in 2012 over 2011. Whereas, the largest number of city surveillance respondents (60 percent) suggested their budgets would fall in 2012 over 2011. While, the largest number of government respondents (43 percent)  suggested their budgets would remain the same in 2012 over 2011.

ME: The results reported are for 2012 vs. 2011. Do you have any insight into spending/budget changes for 2013?
WR: The survey was conducting over July and August so we didn’t ask questions about 2013. Early signs suggest the North American security market was relatively strong in 2012 which is likely a result of previously mothballed and delayed projects coming online. 2013 growth may remain healthy but not quite as strong as 2012.
 
ME: What do you make of the idea that casinos are increasing security budgets? Is it a matter of compliance? Putting off improvements since the economy tanked and then they got to the point where they really had to upgrade? Gaming is generally considered discretionary spending, is this a sign that the economy is on the uptake?
WR: This was a very interesting result from the survey. Regulation certainly pays a major part in the casinos and gaming market. For example, if a DVR is not recording to standard it will have to be replaced no matter how well the casino is doing. However, the economy has started to pick-up and consumer confidence is starting to build. Assuming there is no economic cliff dive in 2013, casino and gaming spending on security equipment could start returning to pre-recession levels.
 
ME: What might integrators glean from this specific info?
WR: Without wanting to appear too optimistic; after a few years of uncertainly, the outlook does look positive for those integrators who specialize in the casinos and gaming sector. One thing to bear in mind is the survey results suggested integrators that demonstrate a clear ROI on projects are most likely to win new business. Whilst the casinos and gaming sector is still in recovery mode, users may be looking for integrators show how their capital invested will be well spent. One way to do this is to demonstrate the ROI of a new solution.
 
ME: What other info should TechSec attendees look forward to learning at your TechSec presentation?
WR: During the presentation I will be showing attendees who the end users thought are the most influential project champions and which stakeholders have the most importance over the final decision to purchase.
 

 

Surveillance provider restructures debt

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Monday, January 7, 2013

A surveillance/RFID manufacturer that specializes in the library vertical, as well as retail and industrial/manufacturing sectors, has restructured its debt. The company, Sentry Technology Corp. out of Ronkonkoma, N.Y., is one I haven't written about recently.

A number of years ago, we wrote about some internal restructuring it did and deals it had with ADT and Chubb--but we haven't written much since. I have call into company president and CEO Peter Murdoch to get an update.

Sentry's products are used "by libraries to secure inventory and improve operating efficiency, by retailers to deter theft and enhance productivity, and by industrial/institutional customers to protect assets and people."

The news, announced Jan. 4, is that Sentry Technology paid off a $2 million in unsecured debt plus $743,000 interest to Brookfield Technology Fund. With this payment, "with the exception of $75,000 owned to Brookfield all secured company debt ... is owned by company directors Robert Furst and Peter Murdoch."

 

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