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Is AlarmCap/Microtec an appetizer acquisition for Stanley?

Thursday, September 22, 2011

Stanley CSS announced on Day Two of ASIS, that they’d finalized the acquisition of First National AlarmCap, which operated under the name of Microtec Security Systems—and was, according to Stanley, Canada’s fourth largest alarm company.

I’ll be talking to Tony Byerly in the next day or two about Stanley’s plans to integrate this business. Stanley wasn’t talking back in August when we reported the deal and spoke to Fred Fong, former CEO of the company.

It’s a big buy. They paid $61 million and got 79,000 accounts, a bunch of dealers and two U.L Canada listed central stations. Here’s the story we wrote in August. It’s also on page 18 of our September printed publication. 

So, I’m eager to learn more about this deal, but I’m also wondering if this just an appetizer acquisition before Stanley buys the big entrée—ADT?

As I’m sure you know, Tyco announced Monday morning that it’s splitting into three independently traded companies, so ADT will be up for grabs around ASIS time next year. (Those former Brink's/Broadview/ADT dealers might get a chance to rebrand again.)

Stanley’s certainly interested in big residential companies. It made a play for European alarm company Securitas Direct earlier this year, but lost out to Bain Capital and Hellman & Friedman, who paid like  $3.4 billion.

Next September, will we be reporting two big deals: "Schneider acquires Tyco Fire & Security" and "Stanley Black & Decker acquires ADT"?

ON a separate, but related note, UTC, which was rumored to be looking at Tyco last week, did, in fact buy Goodrich.


McGinn, Smith investors left in the lurch?

Wednesday, September 21, 2011

I’ve written here before about Timothy McGinn and David L. Smith, principals of McGinn, Smith & Co., an Albany, N.Y.-based investment firm that conducted investment dealings in the alarm industry.

The U.S. Securities and Exchange Commission filed charges against them last year, contending that from 2003 to 2009 the high-living pair ran a Ponzi scheme, diverting millions of dollars into financially troubled entities and also into their own pockets.

But we haven’t heard much about the people they allegedly swindled—until the Albany Times Union newspaper published a story this week detailing the plight of the approximately 900 victims, saying it’s doubtful they’ll ever get their money back.

Here’s more from the Sept. 20 story:


ALBANY -- Lesley Levy was a Wall Street adviser. Through her years of hard work, she said, she hoped to spend her retirement comfortably nestled in her San Diego home.

Now, faced with the loss of up to $2 million in investments she said she steered to an Albany brokerage, McGinn, Smith & Co., Levy, 61, fears she has lost everything. Levy said she's living off a credit card, shops at Dollar Tree and is unable to afford even routine medical visits. She has taken in boarders to try to cover her mortgage payments.

"You don't know what it's like to have strangers in your house," she said, recounting a tenant who would boil fish in her kitchen late at night. "It's horrible."

Levy is among an estimated 900 individuals and organizations that placed investments with McGinn, Smith & Co., which was accused of fraud 17 months ago in a complaint filed by the U.S. Securities and Exchange Commission.

For several decades the firm's founders, Timothy M. McGinn and David L. Smith, were part of a country-club elite, rubbing elbows with the area's wealthiest residents while playing golf in exclusive destinations like Ireland and Palm Beach, Fla. They cultivated clients at the highest levels of society and built their brokerage into a lucrative firm that was once so connected their payroll included former state Senate Majority Leader Joseph L. Bruno.

But according to the SEC's civil complaint, McGinn, Smith and its various entities orchestrated what eventually became a Ponzi-type scheme that left hundreds of people financially devastated. The "house of cards" the SEC has accused the brokerage of building began to collapse three years ago. Even then, the SEC said, the brokerage's leaders began trying to hide their assets while raiding funds and luring money from more alleged victims.

Now, more than a year after the SEC stepped in, and as a federal criminal investigation remains pending, it's unclear whether investors who lost money will ever be repaid.

The SEC estimates the alleged fraud unfolded over at least a six-year period and involved up to $136 million. The firm's largest investment account, called the Four Funds, has less than $500,000 in cash despite owing investors at least $84 million.



ASIS 2011 meetings hint at tipping point for managed services

Wednesday, September 21, 2011

So I got back from ASIS International 2011 late last night and have been playing catch up at my desk all day. I'm just now getting around to going through my notes and putting together a little something to let all of you know how it went.

While I was there, I had the chance to sit down with a number of people and ask them how the show and their year was going as we approached the beginning of the fourth quarter.

It seemed like everyone was talking about the age of managed services. Integrators are no longer simply accepting them, but are beginning to expect them as well. According to some I with, the advent, proliferation and advancement of wireless technology has pushed the industry to a tipping point.

OzVision global director marketing Matt Riccoboni said smart phones had trained end users to expect more.

"Smartphones have changed the way we interact with data. It's no longer sufficient to say, 'I'll look it up later.' Smartphones have created an immediate need, an immediate thirst for data. So what we're doing is making services like video available that way," Matt told me. "And it can be for a lot of different things: an audit trail, for liability issues in the healthcare vertical … The channel partners, the integrators are really thinking of where this can be effective…. for example, with quick serve restaurants, integrators can offer access to video that shows a manager if people are consistently leaving because of long wait times. That's business intelligence that tells the manager they might want to bring on more staff to better server their customers."

I've talked with Matt before about the company's partnership with Sonitrol as well other issues.

It's all about choice and not getting stuck in the past, according to Telular vice president of marketing and business development Shawn Welsh.

"Our focus has been raising RMR. Cellular is now a trusted pathway, so now how do you leverage it to make more money?" Shawn asked. "One way is through offering interactive services, which we developed with the TG-1 express that work with older panels as well as new panels. You can offer an iPhone app to a panel from the '80s."

talked with Shawn last month about the new manufacturer-agnostic two-way voice capability Telular was touting at ASIS.

Diebold director of security solutions Jacky Grimm pointed out that managed services allowed integrators a way to offer a lower price point and a lower learning curve for getting in on the value managed services can offer.

"Technology is changing so fast. It's difficult for end users to have the money there to update, so what we're doing is packaging it in to leverage payment over time," to include things like training, oversight and hardware and software updates. "So you pay a flat fee up front, but the technology keeps pace with the world."

I've also spoken with Jacky recently about a number if things Diebold had going on, including their insight on managed access control, their move to pick up UL 2050 certification, and their addition of exta, managed services like targeted weather alerts.

I also met with Bruce Mungiguerra who is vice president sales and dealer development at Monitronics International. He told me their training program was performing nicely for them.

"We've enhanced MoniX a great deal," Bruce told me at the Monitronics booth. "It's like boot camp. It gives dealers a stronger relationahip with us ... We compared growth for new dealers and the average growth from month three to month 15 was 160 percent."

Bruce talked with me last year when Moni picked up a large dealer, Power Home Technologies, as an authorized dealer.

I also had a chance to sit down with Rob Tockarshewsky, Pete Tallman and Ken Modeste from UL. We talked about standards development, different UL listings, webinars, and UL's work with vetting hardware and software for Federal Information Processing Standard (FIPS) 140-1 and FIPS 140-2 compaliace.

"FIPS 140 is a standard that's based around encryption and encryption technology in the federal space. It's been a requirement since 1995 ... Any kind of encryption has to go through this vetting process ... Any product, whether it's a USB stick, an alarm panel, a network router or printer--if it has any kind of encryption technology is required to go through this program for testing and evaluation," Ken told me.

"As more and more of these companies become more involved with the federal government, the need for FIPS testing becomes very important," Rob added.

I've spoken with Rob and Pete over at UL before on matters ranging from the competing NRTLs and UL 2050 listing and what it can mean for an alarm company.

I also had a chance to chat with former SDN editor Rhianna Daniels--now the principal at Compass PR--who dropped by SSN's booth with some of her clients from Next Level Security Systems who were due to sit down with SDN managing editor Whit Richardson for an on-camera interview. I interviewed Rhianna and NLSS' Amelia Hew earlier this year at ISC West in regards to their work with the Women's Security Council.

Over all, it was a fruitful trip to Orlando.

Will UTC Fire & Security make a play for a Tyco now?

Tuesday, September 20, 2011

Big news yesterday out of Tyco. The conglomerate that Koslowski spent years building, is slowly being sold off and consolidated by Ed Breen. It's a smart move, according to company executives I surveyed yesterday.  One company executive said it'll be much easier to grow ADT resi and small business and ADT commercial and fire as two separate traded companies. And, flow control doesn't really fit in anyway.

Yesterday's announcement that Tyco would split into three independent, publicly traded companies, had people wondering--again--if UTC Fire and Security might make a play for one of the peices. After all, last Friday, Rueters reported that its parent company United Technologies Corp, " was lining up financing in the double-digit billions of dollars to support a major acquisition in the U.S., according to two people with direct knowledge of the matter."

Tyco's stock rose for a while on Friday on rumors that UTC was eyeing Tyco, until someone determined that the amount of cash UTC was raising wasn't enough to purchase the whole of Tyco. So, tongues were wagging yesterday. With Tyco splitting up, UTC could buy just a part of Tyco. They could make a resi play or beef up their commercial fire and security business. Then again, if Ed Breen and company were really teeing the fire and security business up for sale to UTC, why'd they roll the security products business into the mix? That would be a lot more integration of product, something UTC Fire & Security seems to be pretty busy with these days.

Word is that UTC is actually interested in Goodrich (aerospace not tires) and that they're in talks to acquire the company for like $15b. Here's a story on the Goodrich deal, which the reporters say could be announced later this week.

I'll be meeting with ADT executives today, so will have more information on the split later.  I'm talking to Schneider tomorrow. Remember the Schneider rumors this summer? Maybe they'll be interested in the Commerical fire and security business now that it'll be flying solo?

Vivint installs hit the mark

Monday, September 19, 2011

This has been milestone year for Provo, Utah-based Vivint. First, on Feb. 1, the 14-year-old company rebranded from APX Alarm to better reflect the addition of home automation to its home security offerings. Among other highlights this year, Vivint also announced this summer that it had created Vivint Energy, a new division the company said would “pull together the company’s smart meter installation capabilities, energy management services and renewable energy initiatives.”

Now, Vivint has a new announcement: the recent completion of its 1 millionth customer installation.

“This is a big milestone for our company,” Shawn Brenchley, senior vice-presiden said in the company's Sept. 15 press release. “Vivint’s philosophy is to reinvest company profits into our people, products, and services. The millionth install was made possible because of the valued members of our organization, along with Vivint’s ongoing commitment to providing superior customer service.”

The release also quoted the 1 millionth customer, James Owen of Decatur, Ala., as saying:  “My grandchildren are always teasing me about being old fashioned when it comes to technology. Vivint’s installation and service techs took time to show me how to use my new system. Thanks to their great customer service and Vivint’s easy-to-use technology, I can now manage my door locks, lights, and even thermostat from my smartphone. My grandchildren will sure be surprised.”


Contractors Wire & Cable shuts its doors

Thursday, September 15, 2011

Contractors Wire & Cable, an outsource manufacturer and distributor of low voltage cable and wire products, closed its doors on August 26.

The distributor, which was headquartered in Livermore, Calif. had distribution centers in Livermore, Dallas, Atlanta and Anaheim.

The company sent an email to customers which read:

“It is with regret that we advise you that as of today, August 26, 2011, Contractors Wire and Cable, LLC, is closing its doors, and ceasing operations in all of its locations. This is a result of the prolonged difficult economic conditions in our industry that have adversely impacted the Company. We appreciate the support and business that you have provided to us over the years, and wish you success in the future.”

Derek McMullen, president of the company could not be reached for comment. McMullen sold the company to private equity firm Carlisle Enterprises in 2007, though he did retain an ownership stake in the business.

Other distributors, Tri-Ed Northern and ADI declined comment on this story.

Carlisle Enterprise managing partner, David Canedo, did not return calls or an email from SSN, requesting comment. Contractors Wire & Cable is still listed as part of Carlisle’s portfolio on its web site.

Canedo and McMullen were interviewed by SSN in March of 2008, when the company expanded to Atlanta. At that time, both were optimistic about the growth of the company. 

  At that time, McMullen told SSN that the company had $25 million in revenues in 2007, was expecting $31 million in 2008, and had the goal of hitting $75 million by 2011.

From that interview: “[Canedo] and McMullen both feel, too, that Contractors' combination of manufacturing and distribution abilities give the company a competitive advantage. "In our manufacturing side," said McMullen, "the one thing that sets us apart from other manufacturers is they're not specialists. Being geared into a certain area, we can look for ways to reduce costs to the installers."

Canedo also pointed to Contractors' diversification between the residential and commercial/industrial markets as a reason for continued growth. He admitted to being surprised by how deep the downturn in the builder market has been, but "so far there hasn't been a downturn in the commercial/industrial side," he said. "Whatever we're losing on the residential side we'll more than offset with the industrial side."


DeAngelis steps down at IQinvision

Wednesday, September 14, 2011

IQinvision officials have confirmed—in a press realease—that long-time president and CEO, Pete DeAngelis, has stepped down. DeAngelis will remain on the board, and a board of directors' member, Gary Sutton, will take over while they find a new CEO.

Here's the official stuff with prepared remarks:

“Pete has been here from the very beginning,” said IQinVision CFO Charles Chestnutt, “he was the driving force taking us from nothing to positioning us as a leader in the Megapixel IP camera space. Pete is a real entrepreneur and he understands that new technology and leadership is needed to take the company into its next growth phase. We are grateful that he will continue to provide key strategic counsel as we launch this next phase in IQinVision’s evolution and growth.”

Along with Paul Bodell, Rob Ledenko, and other top IQinVision executives, Pete will be in attendance at the upcoming ASIS International tradeshow in Orlando, 19-21 September, where the company will be highlighting recent product and major new installation news at booth #1533.

Honeywell, Opower to empower homeowners

Wednesday, September 14, 2011

More and more homeowners are becoming familiar with smart meters, which utility companies are installing on homes to better monitor energy usage.

But now Honeywell is teaming up with Opower, an Arlington, Va. provider of energy information software, to create smart thermostats to help homeowners keep track of their energy use and save money. Here’s more from a press release that Opower released this week:

Honeywell and Opower announced plans to jointly develop energy management tools to help consumers cut their energy use and expenses. The companies will combine Honeywell’s expertise in residential automation and control systems with Opower’s industry-leading energy data analytics and customer engagement techniques to create intuitive, reliable and cost-effective technology that will provide energy savings in the home and across the entire electrical grid. 

Honeywell and Opower will initially launch a platform that includes a Web-connected programmable thermostat to help utilities boost energy efficiency programs, driving deeper savings in the home and maximizing return on investment. The technology will measure, analyze and report homeowners’ electricity use, including detailed information from the thermostat, which controls heating and cooling systems — equipment that accounts for almost 50 percent of all residential energy consumption.

 Utility customers will be able to access the data from a Web portal or mobile application to get a clear and comprehensive snapshot of their energy use and spending. The technology will also suggest and automatically implement cost-saving changes, and will present equivalent data from similar families in the same geography to provide a benchmark and additional context.

“Empowering consumers to adjust how they use electricity starts with awareness,” said  Jeremy Eaton, vice president of energy solutions for Honeywell. “But it doesn’t end there — they also need easy-to-use controls to implement changes and make them stick. We believe Honeywell and Opower will successfully combine information, motivation and control to help homeowners reduce energy consumption and costs.”

The companies plan to pilot the new product with select utility partners over the next few months.”



Illinois man faces 75 years in prison relating to allegedly illegal surveillance

Wednesday, September 14, 2011

A Facebook connection of mine recently posted a link to a YouTube video that got me all fired up. The video details the developing story of Michael Allison, an Illinois man who, in an attempt to protect himself and his aged mother from what he considered police harrassment, recorded police he felt were abusing their power. Allison now faces 75 years in prison because he had the audacity to record police whom he felt were misbehaving on his property. These police weren't even in public... they were on his (or his mother's) property and because Allison recorded their voices without their consent on his cell phone during the exchange, they're hitting him with five counts--based on some archaic laws on the books in Illinois--of felonious eavesdropping. It's a class 1 felony in Illinois and literally equates Allison, if convicted, as a felon as bad as murderers and rapists... Really? The police have nothing better to do?

So when I watched the video I got pretty fired up, given that surveillance is something I write about an awful lot, most recently compiling a sourcebook article on surveillance and civil liberties, with a focus on Chicago. I spoke with people from the municipal side in Chicago who maintained public surveillance was a necessity as well as folks from the ACLU, who claimed civil liberties were being infringed upon by surveillance in public.

Police, of course, are allowed to videotape citizens at will.

Ken Kirschenbaum has, in his email newsletter, delt in past with liability issues relating to surveillance, especially audio.

They Huffington Post has an interesting look at the Allison case as well, as does a site called Death & Taxes, which points out that the Allison case is pressing ahead "just days after the 1st District Court of Appeals upheld the right to record police actions in public in Glik v. Cunniffe."

I put out emails to the Chicago chapter of the ACLU as well as to some former police with whom I'm acquainted to see if anyone had any input. I've heard nothing back from the ALCU, but former police officer and Illinois Electronic Security Association president Chet Donati (DMC Security) got back to me with some input. He seemed a little surprised by what's going on in the Allison case.

"If what this guy asserts is true," Chet told me, "it seems like they're taking the law to an expensive and unnecessary extreme."

Chet has spoken with SSN a lot lately, for stories about his trials and tribulations with former IESA executive director Marsha Kopan as well as in regards to the association's ongoing battles with local fire districts.

This is certainly an interesting and messed up story. I'd love to get your opinion. Do you think citizens should have the right to record police in public or in private? Do you think Michael Allison needs to be put away in federal prison with rapists, murderers and thieves for the remainder of his life because he had the gall to record police pushing him and his mother aroundwithout their permission? Are anti-eavesdropping laws archaic? Or are they defensible?

Let me know your thoughts.

More security videos and SSN returns to Texas!

Monday, September 12, 2011

Avid readers of this blog will recall when SSN associate publisher Gregg Shapiro and I went on an adventure down to Texas last year. It was a blast and we met with a lot of security folks! I got a lot of copy out of that trip and learned a lot as well. Part of what we were traveling down there for was a dealer fishing trip put on by NMC. This year, Gregg and I had another adventure driving from the airport to our hotel in Charlotte, N.C. for ESX. Me, Gregg and his haughty English sounding GPS device cruisin' the streets of Charlotte. Awesome.

Just recently, Gregg again traveled down to Texas and checked out a cool event UCC was having for its dealers, a dove hunt. Now, unfortunately, I was unable to attend, but Gregg did manage to capture some pretty awesome video of UCC president Teresa Gonzalez and a number of other UCC employees rockin' the house with a UCC-themed rewrite of John Mellencamp's R-O-C-K in the USA.

Here're some of the specifics: It was the 8th Annual UCC Dove Hunt Extravaganza during which UCC hosted over 150 folks, representing about 80+ dealers from across the country from Pennsylvania to California. The program began with tours of UCC’s San Antonio center on Thursday, September 8. A dinner sponsored by DSC and SGI was hosted that evening at the Alsace Hotel & Spa in Castroville, Texas and the hunt then took place at the Nooner Ranch in Hondo, Texas on Friday, followed by a bbq dinner and music. Including the special performance by Team UCC.

I've written about security videos before. I always like seeing bits of footage caught or created by the security peeps about whom I write.

Rock on UCC!