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Tyco post-split talk Part II: Are acquisitions in the air?

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Thursday, November 3, 2011

Here’s Part II (I posted Part I yesterday) of a blog with some Tyco post-split details, which I found in the process of reviewing the Tyco International Conference Call. The call took place on the day that Tyco announced its plan to split into three publicly traded companies.

On that day, most of the industry, including yours truly, was running around the ASIS show floor. The quotes below are courtesy of Seeking Alpha.

Was the split construed to ready Fire & Security or ADT for acquisition? And, is there any government regulation that would preclude the acquisition of ADT or Commercial Fire and Security from taking place in the next 18 months?

Asked if Tyco had “not had substantive conversations with any outside parties about the sale of any of these businesses?” Tyco CEO Ed Breen said: “We are well aware of the laws and regulations out there and … we are very careful about what we do. So I will leave it at that.”
 
OK, well is there anything to preclude one of the entities from being acquired in the next 18 months?
“If anyone approaches us about a piece of the … our Board would have to take that under advisement. It is our fiduciary responsibility, but it is not our plan. Our plan is to get these out there on their own and let them play in the their industry,” Breen said.

Answering a question on a different topic, Breen said: “I’m a big believer that there going to be consolidation in these industries. I think you’ve already been watching some of that occur and we want our businesses to be able to play in that environment in their respective industries.”

Asked about the split between resi and commercial security, Breen said much of the separation has occurred already, when ADT split into residential and commercial divisions.

And, in terms of the monitoring operation, Breen said they have a plan about how to separate the two and “it’s easier than it sounds.”

Whey didn’t they bifurcate the two businesses back in 2006? The companies were too fragmented at that time, Breen said. “The management teams were more fragmented and there wasn’t consistent performance.”
 

Vector: National accounts in play; we want them

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Thursday, October 6, 2011

Vector Security says national accounts customers are “in play” due to acquisitions and corporate break-ups. And, Michael Grady, Vector Security’s EVP told me, in an email interview that Vector is poised to expand its national account business for a number of reasons: Vector is still privately owned and it has money in the bank (something Vector president Pam Petrow talked to me about recently when Vector got a new $225m credit facility.)  Also in Vector’s favor, he said, is its move, announced Tuesday to a new National Service Center in Gainsville, Va.
The new facility is about 10 miles away from its former facility in Manassas, Va.
Grady said that there’s a “hyper consolidation” in the loss prevention industry similar to what happened in 2001. Further, he said, “companies that have long established histories of serving national customers are today literally ‘in play’ again, due to factors such acquisitions and corporate break ups. That always creates doubt in customers, but this time, they only need to look back ten years.  So those who are really concerned and indeed recognizing a trend here ... and that bodes well for Vector Security because of our high level of corporate independence and stellar financial stature.”
Last year, I interviewed Vector’s VP/GM for national accounts Joe English, who told me that Vector expected to take retail national accounts market share from ADT. He said ADT had about 50-55 percent of the market, and uses the same AM EAS technology that ADT uses.  He said his goal is to “make [Vector] the predominant number three player in the EAS industry.” He further said that Vector expected to do about $75 million in national accounts business in 2010.
Grady declined to give me revenue figures for 2011 or gains in marketshare figures, but he did say that “As far as our sales figures last and this year, we experienced strong growth in 2010 and the trend is continuing in 2011.”
Vector’s new National Service Center is 27,000 square feet, has 130 employees who are involved with “Project Design and Coordination – Field Installation - our National Service Center – National Compliance Management – Billing – Engineering – TSP Recruitment and Management – Product Testing and Evaluation – our CRM department and Equipment repair.”
The center has a Virtual Loss Prevention Services Lab, which Grady described thus: “As our national account customers look towards newer and innovative technologies to resolve loss prevention, emergency communications, systems performance and ROI measurement, disaster preparedness, RFID applications, LP case management, managed EAS, IP video and analytics, and Network Management, we wanted to construct an environment whereby we can bench test the equipment itself, define new applications and compile ROI data. This facility allows us the technological platforms, space and environment to do so.”
The new facility is set up to enable Vector to service video, access, and EAS equipment onsite. Previously, “like most LP services providers, we sent malfunctioning equipment back to manufacturers and arranged for it to be repaired and sent back to us. But as we took on large-scale deployments of video and EAS equipment, we found that model to be unacceptable to our CRM commitments,” Grady said.
Testing new equipment will help the company stay on top of new LP protocols—both best practices and government regulations, Grady said. “It could mean New protocols such as SOPs, new product applications,  adherence to national compliance, and reliance upon exceptions based instantaneous information are required to be managed and even anticipated from our national customers based upon changes in the nature of crime, employee theft, shoplifting and even litigation such as slip and fall and insufficient security suits.”

And Vector is not solely interested in retail national accounts. "While most earlier national account models were built upon the vast expansion of retail, our key defining element for likened customers is 'multi-site' with a need to control security, loss prevention and employee safety on a national basis," Grady said. "Today, all types of services; that were performed previously by local purveyors, and being targeted by national suppliers.  The “Doc in a Box” in and out treatment center was just one area of the new entries in the market. There are many more to come."
Vector has national accounts customers in 44,000 locations. The company says it receives 26,000 service calls per month, all of which are qualified, and result in about 4,000 qualified service visits. Those service calls are resolved in an average of 2.6 days. All of Vector’s national accounts are monitored at Vector’s central station in Pittsburgh.
 

Courts side with alarm industry in Illinois

Efforts by public entities to monopolize fire alarm monitoring suffer setbacks in recent rulings
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10/04/2011

ARLINGTON HEIGHTS, Ill.—Two court decisions in late August bolstered the alarm industry’s position in an ongoing dispute in Illinois over public entities taking control of fire alarm monitoring away from private companies.

Provident hires new developer

SSN Staff  - 
08/22/2011

VANCOUVER, B.C.—Provident Security on Aug. 20 announced it has hired Bob Stevenson as lead developer.

Tyco looks to acquire Visonic

Visonic products align with ADT's interactive service Pulse
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06/21/2011

BOCA RATON, Fla.—Tyco International, parent company of ADT, is in talks to acquire security product manufacturer Visonic, which is based in Tel Aviv, Israel.
“I can confirm that we’re in discussion with Visonic and that may or may not lead to definitive transaction,” Tyco spokesman Paul FitzHenry told Security Systems News on June 21.

Comcast sells home security/home automation with iControl

IControl, which also partners with ADT, announces first broadband provider partnership
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06/16/2011

PALO ALTO, Calif.—It’s official: Comcast is selling home security and home automation services powered by iControl software in seven of its 18 markets across the country. The announcement was made by iControl, which is based here, on June 9.

CSAA General Meeting: 'Overall, we're in a very healthy situation.'

Board of directors approves funding plan to build ASAP program proxy server
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06/16/2011

CHARLOTTE, N.C.—The Central Station Alarm Association held its general membership meeting on June 7 at the ESX show, and the message to attendees was that while the economy is tough, the monitoring industry's association is doing okay and is pushing for action in the form of a nationwide initiative to radically revamp public safety communications.

Is a Securitas/Niscayah reunion imminent?

Mack says reunited companies better positioned to compete with the likes of G4S
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05/19/2011

STOCKHOLM, Sweden—Is it strange that guarding giant Securitas, which divested itself of its systems integration business (Securitas Systems, now Niscayah) five years ago, this week made a bid to buy that very same business back?

Schneider said to mull bid for Tyco

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04/12/2011

PARIS—Schneider Electric, based here, is working with bankers to assess a bid for Tyco International, according to an April 11 Bloomberg report, which cited “three people with knowledge of the matter.”

AICC group to push for national licensing

Move would make monitoring across state lines easier
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03/24/2011

WASHINGTON—Following the New York state licensing debate over Article 6-E, the Alarm Industry Communications Committee—the membership committee that handles the security industry’s lobbying in Congress and with the FCC—has formed a subcommittee to execute the push for a national license for central stations. The committee, which had its first meeting on March 3, has important work to do, according to industry leaders.

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