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Security 101 touts franchise model

Looks to national accounts for growth
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08/08/2012

WEST PALM BEACH, Fla.—Since launching as a franchise-model commercial security company here in 2007, Security 101 has grown to include 26 locations today.

Vivint takes door-knocking rival to court

Vivint contends a competitor used deception to steal Vivint customers
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08/08/2012

PROVO, Utah—Vivint is suing another door-knocking company, alleging it has been using false and misleading statements to “slam” or take over Vivint customers.

Devcon’s new operations center to shut its doors in September

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Wednesday, August 8, 2012

I reported this summer that Devcon Security, a Hollywood, Fla.-based super-regional, was planning to shut down its new 23,000-square-foot national operations center in Irving, Texas by the end of the year.

Now it appears the closing will take place next month. Devcon plans to close the facility Sept. 5, laying off 197 employees, according to a report this week by the Dallas Business Journal. The facility opened in February 2011.

CEO Steve Hafen previously told me that closing the center was part of a company plan to reduce expenses and strengthen the company’s finances for future profitability and growth.

The company also is closing branches nationwide, a reversal of a rapid expansion it had recently undergone. In the past 18 months, Devcon, acquired by San Francisco-based Golden Gate Capital in 2009, transformed itself into a national player with more than 50 branches around the nation.

Hafen previously told me: “Devcon has experienced many changes over the past 18 months, including an aggressive growth initiative and subsequent streamlining of some branch operations.” He said then a reduction in the company’s workforce was anticipated.

The business journal reported that Devcon issued a statement saying that it “has aimed to, and has already made progress on, helping displaced employees transition into new opportunities through job fairs and résumé assistance programs. Devcon Security believes that these changes, while challenging, will strengthen the company and enable more opportunities for those in the industry long term.”

Lowe’s Iris: Boon or bane in fight against false alarms?

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Wednesday, August 8, 2012

On one hand, it’s hard not to see the appeal of Lowe’s new Iris home management system. It’s do-it-yourself for those with the dexterity to install a thermostat, it’s cloud-based so homeowners can control and check on their properties remotely, and it’s inexpensive: starter kits range from $179 to $299, and there are no monthly fees for those who choose to do their own alarm monitoring.

On the other hand, how many homeowners are really prepared to be their own central station?

Sarah-Frances Wallace, a Lowe’s spokeswoman, recently touted the self-monitoring aspect of Iris in an interview with SSN's Tess Nacelewicz. Wallace said homeowners “can respond appropriately” when they receive a security alert, using an Iris camera to see “if there’s an intruder in your home that would require police response … or if it’s the dog knocking something over.”

Wallace said DIY monitoring helps avoid the problem of false alarms, for which many municipalities now charge homeowners a penalty. “This kind of gives the homeowner more control over triggered alarm events in the home,” she said.

But what happens when the homeowner decides the alarm is legit, they call 911, police respond and they find nothing amiss? What happens when the scenario gets played out three or four times in a month at the same residence? Do you think the municipality is going to continue to absorb the cost of dispatching officers and cruisers?

Ask any alarm company owner and I think you'll get a consistent response to that. Municipal budgets are tight and they're only going to get tighter. Just because a professional wasn't involved in the installation and monitoring of a system doesn't mean local officials are suddenly going to forgive and forget when it comes to false alarms.

For homeowners who want a little help when it comes to dealing with alerts from their Iris system, Lowe's offers a self-monitoring service for $9.99 a month. "You can set it up so if there's a triggered event in your home, it would email [or text or call] your neighbor … [or a] small network of people you'd want to receive notification of events," Wallace told SSN.

The service is ideal "if you're on vacation and you receive a notification that there is an event in your home," she said. "You could contact your neighbor—because they've also received [the notification]—and they could look into it for you."In a perfect world, it all ends well. If a pet triggered the alarm and the neighbor happens to be around to make that determination, everyone sleeps easy that night. But what if it wasn't Fido who did the deed and it's an intruder instead? What happens when the neighbor walks headlong into that situation?

Hello, Ken Kirschenbaum.

The point is, there are times when it pays to do things yourself and times when it pays to let professionals handle it. Again, it's hard to dispute the appeal of Lowe's Iris system for many people and for many applications. But should home security be one of them? Let the buyer beware.

Battered but unbowed

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Tuesday, August 7, 2012

Wayne Wahrsager’s New York Merchants Protective Co. Inc.—an alarm company in existence for more than 100 years—is no more as the result of a $20 million breach-of contract lawsuit filed against the company and Wahrsager last year by Bank of America.

But Wahrsager tells me he is still very much a player in the security industry—and planning to launch a new alarm company in October with $50 million in funding behind it.

“You just brush yourself off and start all over,” he told me this week.

It seems that what Wahrsager experienced over the past year and half would have had most people down for the count.

First, in January 2011, came the Bank of America lawsuit contending it was owed more than $19.2 million for the default of a loan.

Then, four months later, Wahrsager got fired from his job as president of NYMP and pretty much literally got thrown out of the company’s Freeport, N.Y.-based office by the receiver a judge appointed to run the company. The receiver changed the locks at the office to keep Wahrsager out but he just took his office door off its hinges and continued coming to work until a judge ordered him gone that May.

Then, last October, the judge approved the sale of NYMP’s assets to pay off creditors. The sale to Professional Security Technologies of New Jersey was completed earlier this year, Wahrsager told me.

He’d been involved NYMP since 1988, but the previous owners were cousins so it was a family business that turned 100 years old in 2010, he said.

Wahrsager contends that the company went for far less than it was worth, and that if Bank of America had been willing to work with him, he would have repaid the loan “100 cents on the dollar.” He said he’s still a named defendant in the lawsuit, which is still pending.

But Wahrsager said he’s working as a consultant for Bellmore, N.Y.-based Commercial Fire & Security, which he said was formed about a year ago.

And he’s involved in the start up of a new company that he said has a group of investors behind it and is expected to launch by the end of October if all goes as planned. The company may be called Commercial Fire & Security—the new company may acquire the existing one—or take on a new name, he said. It will be based somewhere on Long Island, Wahrsager said.

Stay tuned—it looks like another round for Wayne Wahrsager.

Who will buy AlarmForce?

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Tuesday, August 7, 2012

AlarmForce, a super-regional security company based in Toronto, announced that its board of directors is taking a look at selling the company. The company has hired Imperial Capital to help it with a possible sale.

The company's market cap value today is listed as $135m and its enterprise value is $119m.

I asked Richard Ginsburg, former CEO of Protection One who is now managing partner at G3 Capital Partners, what he thought about the sale of AlarmForce. He said he thought the company is well run and that CEO Joel Matlin "has done a fabulous job of identifying a segment of the market open to value-oriented products (like their new video offering) at prices that are at or lower in comparison to traditional systems with basic offerings."

Ginsburg also said he believes "a company like AlarmForce is in a great position to compete with the likes of industry leader ADT and the emerging cable and telecom companies because of [AlarmForce's] single-minded focus on enhanced services like two-way voice and now video services." He added that he believes "some of the traditional companies are in a weaker position to compete in comparison."

Ginsburg predicted the company will get "good interest"  and said Imperial Capital has "formed a great niche in the M&A sector so they are a good choice [to help out with a sale.]"

The last time I spoke to CEO Joel Matlin was back in the winter of 2010 when he was opening a fourth office in Minneapolis/St. Paul.It has offices in North Carolina (opened in 2005), Ohio (opened in January 2006)  and it opened an office in Georgia in 2007.

AlarmForce does security alarm monitoring, personal emergency response monitoring, video surveillance for resi and commercial customers. Something that’s unique about AlarmForce is that it manufactures and installs its own two-way voice home alarm systems. When I did that interview, AlarmForce had 103,000 accounts in Canada and the U.S., which Matlin told me was up from 56,700 accounts in 2006. Today the number of accounts is closer to 125,000.

“Canada is a tough country to do business in. It’s got a population the same as the state of the California, but it’s spread out over a country that’s much larger than the U.S.,” Matlin said. In addition to dense population centers that are easier to penetrate, “the perception of crime is stronger in the U.S. than it is in Canada.”

Wonder who some potential buyers might be? One possiblitiy, in my opinion would be Stanley, which expanded its resi business in Canada last summer with the purchase of Microtec Security Systems. It got 80,000 accounts and additional bi-lingual monitoring capability out of the deal.

Or I suppose AlarmForce could be a bolt-on for a telecom that’s getting into the security business. Rogers Communications maybe? Here’s a video from the summer of 2011 where we talk about Rogers Communications working (in secret!) with iControl to get into the security industry.  And here’s a story about the deal.

AlarmForce board of directors has formed a committee of independent directors to supervise the strategic review.

 

Sizing up the competition

Go small for better service and big for better pricing? It’s not always that easy when comparing central stations
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08/07/2012

“Don’t look back. Something might be gaining on you.”
That pearl of wisdom from baseball legend Satchel Paige could very well be applied to the world of wholesale alarm monitoring. The competition is fierce and getting fiercer, raising the stakes for central stations of all sizes. Dissatisfaction over real or perceived problems can prompt a dealer to jump ship, costing a company a chunk of RMR and maybe even a bit of its reputation.

Industry veteran mourned

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Monday, August 6, 2012

We at Security Systems News were very saddened to learn about the sudden passing of David Merrick, marketing director for Pittsburgh-based Vector Security. A veteran of the industry, he was a member of our Editorial Advisory Board, a great source of knowledge, and also just an all-around nice guy. He’ll be missed.

David, 60, a Pennsylvania resident, died July 31 at a local hospital. Here’s more about his career of more than three decades, provided by Vector Security:

David began his career in the electronic security industry during 1979. Since that time he has held various sales and marketing management positions, first with Automatic Detection Systems and then Triple A Protection, a Pennsylvania-based regional supplier of residential and commercial electronic security and uniformed guard services.

In 1999, David became part of Vector Security, holding the position of Director of Marketing for Vector Security's National Accounts Division.

Active in the security industry, David served as a board member of the Pennsylvania Burglar & Fire Alarm Association, and was the recipient of the NBFAA 2002 President’s Award. He authored a variety of sales and marketing-related articles in a number of industry magazines, and was an editorial board member of Security Systems News.

David’s work has been featured in various industry magazine articles, merited three SAMMY nominations, and captured the honor twice. He was also the author of the National Burglar & Fire Alarm Association’s (NBFAA) Reassuring America Program.

An obituary from the Sheldon-Kukuchka Funeral Home said David is survived by his wife Nina Mowry Merrick; a stepson and stepdaughter; a brother; a granddaughter and a goddaughter.

Online condolences may be sent to the family at www.sheldonkukuchkafuneralhome.com

Hottest security trend in the palm of your hand

Mobile devices top the list at a CSAA-sponsored webinar
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08/06/2012

VIENNA, Va.—It should come as no surprise to anyone in the industry who owns a smartphone or tablet: That mother lode of technology you constantly find glued to your hand is the hottest trend in security.

Vivint adds $50 million to financing; surpasses RMR milestone

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08/06/2012

PROVO, Utah—Summer-model company Vivint announced in June of that it had surpassed a $30 million milestone in RMR, putting it among the top three largest security companies in the nation. Also, the residential security and home automation provider said it had added another $50 million to its financing, bringing its total senior debt financing to $812 million.

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