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Tim Whall

Apollo lands Protection 1, ASG

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Wednesday, May 20, 2015

Apollo Global Management is about to take one giant leap into security with its May 19 agreement to acquire Protection 1 and ASG Security.

Under the agreement, the combined companies will operate under the Protection 1 brand, with Protection 1 CEO Tim Whall at the helm.

Security Systems News reported on the proposed deal last week. Here's that story.

I had a chance to interview Protection 1 CEO Tim Whall, CMO Jamie Haenggi and ASG's CEO Joe Nuccio last night. I was looking for details about how the new management might be structured, but that will have to wait until the deal is closed. The earliest possible closing date would be July, Whall said.

The May 19 announcement did not include proposed terms of the agreement, though $2 billion has been reported by Rueters.

Whall said that the “combination of Protection 1 and ASG instantly gives both companies a wider footprint where they each did not have one and a greater density in the markets where we overlap. There is a definite benefit for the customers as well as the employees. And given our like-minded approach to the operations, the combination will be a force in the marketplace."

Haenggi added that “the combination of the two companies creates a $40 million recurring revenue and over $600 million entity, with more organic growth and acquisitions on the horizon. It has never been Protection 1’s or ASG’s goal to be the biggest—it has always been both companies aim to be the best both for our customers and our employees.”

Whall, Haenggi and Nuccio all spoke about the benefits of having a private equity group the size of Apollo (this group manages $163 billion) involved in the security industry. When Apollo gets involved, other funds take notice, Whall said.

That means more resources for Protection 1 and potentially for other security industry companies.

I spoke with Michael Barnes, a partner in the consulting and advisory firm Barnes Associates, who is advising Apollo. I asked him about the people at Apollo who are behind the deal. Barnes said while Apollo is a huge fund with many employees, "the team that has been focused on the security alarm industry and driving these deals is relatively small. They are very smart and they cycle through tough decisions quickly. They should make a great partner for P1 and ASG."

How might the group from Apollo work with managment? Barnes said, "From what we can tell, their philosophy seems to be to pick the best horse and jockey and then let them run. To extend the analogy, I am sure they will influence things like what races they enter, but as long as they are winning they will likely just focus on making sure they have the needed resources and otherwise stay out of their way."

I posed the same question to the folks at Apollo in a couple of calls last night, but they declined comment.

Whall, Haenggi and Nuccio also spoke about how the new Protection 1—with the staff, expertise and client base and geographic coverage that ASG brings—will be uniquely positioned in the industry.

Haenggi said that Apollo has been studying the industry for some time. They liked that Protection 1 has "not only has the national footprint, but also the breadth of services and markets serving residential, commercial and national accounts," she said.  "Back in the day, there was ADT that had the size and breadth. Today, there is no one serving across all of these segments with the size of Protection 1. We are in a position to take that lead but do it with a decidedly ‘Protection 1 approach’ to business."

Barnes concurred with Haenggi, saying P1, especially with ASG added, is the largest industry player with "a business model on which most of the industry was built. That is, having a large commitment to specific geographic markets and a broad range of product and services aimed at virtually the entire spectrum of customer types—everything from low-cost, entry-level residential systems, including a DIY offering, all the way up to large-scale systems for the commercial and institutional segments.

Both companies also know how to acquire and consolidate smaller companies, Barnes noted. "This robust approach is in contrast to virtually all of the other large, national players, who are more narrowly focused, such as Tyco, Stanley and Diebold on commercial markets, and ADT, Vivint, and Monitronics primarily on the residential market."

What does Tim Whall say about Protection 1's expansion plans? Will it expand beyond the U.S. market? “I think it's safe to say that Protection 1 will hold not just a U.S. footprint, but a North American footprint," he said.

Asked about possible aspirations for a global presence, Whall laughed and said: “Well, before we talk international, let’s get this deal signed first and over the line—we’ll see how international we get, but I certainly would not rule out lots of growth from Protection 1 over the next several years.”

Private equity is no stranger to security, especially in the past two years. Recent deals include: Vivint to Blackstone, SAFE to ICV Partners, ACA to Norwest Capital, and most recently, Ackerman to Imperial Capital, Barnes noted. However, this deal stands out, he said.  "I can’t remember an investor like Apollo making a first step into the industry, on this scale, doing two transactions at the same time, and particularly with such a good fit between the two."

To attract private equity investors, Barnes said you "have to have all of the requisite pieces of the puzzle…size, capability, management, and growth. In addition, you generally have to have a strong overall industry opportunity, since one is effectively competing against all other possible investment opportunities." 

The long list of dealmakers involved in this transaction include: Financing is provided by Credit Suisse, Barclays, Deutsche Bank, Jefferies and RBC. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal adviser to Apollo; Latham & Watkins LLP is acting as legal adviser to Protection 1; and Kirkland & Ellis LLP is acting as legal adviser to ASG Security. Morgan Stanley and Raymond James are acting as financial advisors to Protection 1 and Goldman Sachs is acting as financial advisor to ASG Security. Barnes Associates is advising Apollo.

Protection 1 has a new field services organization

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Tuesday, December 16, 2014

Protection 1 CEO Tim Whall has always been big on data and measurable metrics. It appears Protection 1 is further fine-tuning its data-driven strategy with the announcement today that the full-service business and home security company is launching a new Field Services Organization.

The new group will be led by Paul Straten in the newly created role of VP, field services. Straten, who has been with Protection 1 for 14 years, will report to Don Young, chief information and operating officer.

Protection one say the new organization "will focus on the service delivery platform to support its rapidly growing commercial and national accounts business." Straten's group will "provide actionable data through the use of technical tools to help the field organization continue to improve upon their delivery capabilities."

The goal, according to a prepared statement from Young is to provide "the most sophisticated service delivery platform in the industry.”

Working with Straten will be Marcel Van Someren who has been promoted to the position of director, field technology and Helton De Oliveira who will serve as director, field services.
Van Someren will  "standardize training on the wide variety of products and services that Protection 1 offers and create educational channels that make it straightforward and impactful for technicians to access and learn."  De Oliveira is charged with "the production and distribution for all reporting related to field production, efficiency measurement, and related operational reporting data. The strategy behind this position is to streamline much of the available reporting and create a universal channel of access by field teams so they have the most accurate and current data available."

Protection 1 has 2 million business and home security customers, 3,500 employees,  70 office locations and five UL Certified monitoring centers across the country. It also has a Network Operations Center with a Cisco Cloud and Managed Services Express Partner Certification.
 

Protection 1 adding solar to its mix

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08/08/2014

ROMEOVILLE, Ill.—Protection 1, based here, is joining the trend of security companies selling solar, the company has announced.

Barnes Buchanan conference to kick off Feb. 7

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01/29/2013

PALM BEACH, Fla.—The 18th annual Barnes Buchanan Security Alarm Conference is scheduled for Feb. 7-9 at The Breakers resort.

Protection 1 makes biggest buy in its history

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01/09/2013

ROMEOVILLE, Ill.—Protection 1—which bills itself as the nation’s second-largest business and home security company—announced this week that it has acquired Vintage Security, which is based in the nation’s capital and has more than 15,000 customers. Protection 1, based here, says the acquisition is the largest it has made in its 25-year history.

MIT gives Pro 1 kudos for 'working smarter'

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Wednesday, October 10, 2012

A study by the MIT's Center for Information Systems Research gives Protection 1 kudos for Working Smarter.

At MIT, Working Smarter is a proper noun, a concept the group defines as having "an organization-wide habit of using a digitized platform to optimize each individual's contribution to enterprise business objectives."

MIT surveyed more than 200 public companies in 2010 and said that those who adhere to practices of Working Smarter "were significantly correlated with higher business impact from IT." Yeah, yeah, that's nice, but you'll be interested in this "and higher impact from IT was, in turn, significantly (and positively) associated with return on equity."

This is not a new study (it was released in February 2012), and Security Systems News has previously reported on many of the details of the Protection 1 operation, its daily scorecard, Tech Tracker, removing its IVR (getting a real person rather than a computer when you call) etc., nevertheless, I thought this report gave a nice snapshot of the operation.

Below are some paraphrased and quoted highlights:

The report says that P1 CEO Tim Whall "set out to explain how individual employees throughout the company could contribute to this goal [delivering outstanding customer service] —in other words, how they could work smarter."

Don Young, P1 CIO spent five months developing a daily scorecard on the metrics related to Whall's "five touchpoints that could make or break customer  relationships: sales, monitoring, billing , installation, and service response." Those metrics include: "Time to installation, time to service, number of sales activities, number of cancellations, retained monthly revenue, and new sales." The scorecard summary and detailed results can be accessed online by top executives, regional leaders and branch managers. They're updated every day and "Thus line managers have come to see it as a reliable guage of their daily operating performance."

The study says: "What's unique about Protection 1's scorecard is that it does not report financial data." This is particularly interesting to me. P1 execs have told me they do not talk to their employees about financial goals but about customer service. This study backs that up.

There's a quote in the study from Don Young: "The P&L will take care of itself if we make sure that the metrics on the scorecard are up to par." And, Joe Sanchez, SVP Operations, is quoted as saying: "There's no analysis paralysis going on here. You want to have a good day? You know what's on the scorecard."

The report says: "The power of the daily socrecard is that the underlying data can be traced back to the daily performance of front line workers."

In addition to removing the automated call system, Whall mandated that all calls be answered within 60 seconds, that service backlogs be eliminated, and that installers and techs show up on time for 8 a.m. appointments.

Technology improvements include Tech Tracker, and Sales Central, which automated the quote, approval, contract submission, record of sale, parts ordering and commission payments.

P1 execs, the report says, think of themselves as coaches rather than managers and offer leadership training to help develop coaching skills for all front line managers.

The report concludes: "In companies that are working smarter, leaders focus attention not on stock price or quarterly P&L, but on determining every day whether everyone is having a good day. Protection 1 achieves working smarter by: 1.developing and constantly enhancing the underlying information 2. articulating and, where appropriate, automating business expectations 3. clarifying individual accountabilties 4. persistently coaching individuals to ensure they understand how they contribute to business success. This is hard work. But if management doesn't commit to helping everyone work smarter, no company can expect its technology to lead to success in the digital economy."

Here's a description of CISR: It "conducts field-based research on issues related to the management and use of information technology (IT) in complex organizations. Established at the MIT Sloan School of Management in 1974, our mission is to develop concepts and frameworks to help executives address the IT-related challenges of leading increasingly dynamic, global, and information-intensive organizations."

The authors of the report are Jeanne W. Ross, Director and Principal Research Scientist at the MIT Sloan School’s Center for Information Systems Research, and Cynthia M. Beath, Professor Emeritus, University of Texas, Austin.

 

CAA symposium to feature four top industry execs

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10/10/2012

SAN FRANCISCO—Leaders from four security companies will speak at an executive symposium at the California Alarm Association’s 2012 Winter Convention, to be held here Dec. 5-8.

Pro 1: ‘We’re excited to be part of the home automation space’

Company’s new P1 Life solution integrates security and home automation
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08/29/2012

ROMEOVILLE, Ill.—Protection 1 announced this week that it has launched a new integrated home security/home automation service called P1 Life.

Protection 1 acquires two commercially focused companies

'Siteview' App newest offering for national accounts customers
 - 
08/22/2012

ROMEOVILLE, Ill.—Protection 1 acquired two commercially focused companies in August, deals that build density in Alabama and New Mexico and fit into Protection 1’s drive to grow its commercial/national accounts division into a $100 million business.

LifeShield customers to be ‘monitored by Protection 1’

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Wednesday, June 6, 2012

Yardley, Pa.-based LifeShield Security offers wireless digital home security systems that are easy to install and are professionally monitored. And now monitoring and installation for LifeShield customers is going to be provided by Protection 1, the second largest security company in the United States.

LifeShield today announced a new partnership with that industry leader. Here’s more from the company’s June 6 release:
 

LifeShield Security is pleased to announce a new strategic relationship with Protection 1, the second largest security company in the United States, that will leverage the five fully redundant UL certified central stations of Protection 1 by offering their services to LifeShield customers as "monitored by Protection 1."

With customers in all 50 states, LifeShield has built a significant national brand using innovative products, value pricing, and strong endorsements from Dan Marino and John Timoney, America's top cop. Protection 1 is known for its highly rated customer service and local presence in 60 key markets. The relationship will leverage the best attributes of both companies and accelerate residential subscriber growth.

"LifeShield Security has grown rapidly over the last couple of years, but we believe we need a local presence to expand our opportunity to grow even faster. Protection 1 has one of the industry's best reputations for local service," said Michael Hagan, CEO of LifeShield. "This relationship with Protection 1 is a win-win-win for LifeShield, Protection 1, and our customers. We both have an over 95% customer satisfaction rating, and together we give customers peace of mind with LifeShield's superior technology and Protection 1's state of the art monitoring centers."

"We are thrilled to partner with LifeShield Security," said Tim Whall, President and CEO, Protection 1. "They have brought affordable interactive services to the industry through their IP- and cellular-based products and mobile applications. Their team has a great track record in high growth Direct-to-Consumer Marketing. We think this industry is entering a new phase of growth and these types of strategic partnerships help both companies gain larger market share in a growing industry."

LifeShield also is known for making innovative use of popular culture to promote home security. Check out my blogs on the company's partnering with Airbnb and also the wide-ranging ways it taps into social media.

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