Insider News & Business for January 2014
New partnerships, Honeywell's Dealer of the Year and company expansions.
‘Synergies and Common Goals’ Prompt Acquisition of Mace CS by Security Partners
Redundancy via three central stations along with broader product offerings and services for dealers and a deeper opportunity for dealers nationwide to share best practices are just a few of the key benefits that Mace Security International, Cleveland, Ohio and Security Partners, Lancaster, Pa., believe will result from an acquisition by Security Partners of the Mace Central Station. The acquisition brings together the companies’ three central stations in 1) Anaheim, Calif., 2) Lancaster, Pa., and 3) San Antonio. Mace Central Station, a subsidiary of Mace Security International, operates a central station in Anaheim, managed by Michael J. Joseph, who has more than 30 years of progressive business experience in the security industry. He will continue to manage that central station. Security Partners operates two redundant central stations — one in Lancaster and a second in San Antonio.
This is the second central station acquisition for Security Partners. The company had purchased the San Antonio central station in September from Response Center USA.
The relationship brings 100 percent uptime for dealer partners and subscribers of both companies as well as national coverage to the dealers in the dealer programs the companies operate, according to the two companies.
The companies do not anticipate any major changes at this time. Instead, the focus is on capitalizing on the obvious synergies between the companies, expanding on their capabilities, and most importantly putting the redundancy in place between Mace’s California operation and the rest of Security Partners’ network, said Michael Bodnar, president, Security Partners, in an interview with SDM.
The deal came together very quickly — in less than six weeks. “When things work, they work. The big element for Mace was the addition of the true redundancy that offers additional security and services to its dealer network, and for Security Partners this culminates its efforts to provide full redundancy. The result is three central stations in separate time zones on separate power grids all tied together,” shared John McCann, president, Mace Security International.
Joseph calls the acquisition the “culmination” of the vision he and McCann had when Joseph joined Mace eighteen months ago. “We wanted to turn the central station into a true national organization with hot redundancy and multiple locations across the country. The benefits to our dealers have greatly expanded through this partnership,” he described. When speaking with SDM, McCann also stressed both companies’ mutual service orientation as a key factor that aided the quick development of the final deal.
“The focus on protecting life, property and creating peace of mind that is present in both organizations was mutually important to both companies. The resulting synergies and common goals are a critical foundation of the relationship,” McCann said.
Mace Central Station, which has been providing wholesale UL central station monitoring nationwide since 1978, currently monitors approximately 70,000 end user accounts on behalf of around 400 dealer clients across the United States.
Both companies have spent time talking to their respective dealers, explaining the goals and details of the acquisition, and the new opportunities that will be available to them.
Mace Security International owns the highly recognized name Mace, and it offers security products including personal defense sprays, home and business electronic security products and central station monitoring.
Security Partners not only offers traditional monitoring services, but it operates an Advanced Services Division, which provides managed video and access control services along with the latest in mobile safety and GPS tracking devices.
“With the combined services, products, and customer service of the two companies we will bring our dealers a very competitive offering,” Bodnar said. — By Heather Klotz-Young, SDM Senior Editor
Honeywell’s 2013 Dealer of the Year
Vector Security Inc., Pittsburgh, Pa., ranked No. 9 in the SDM 100, was named Dealer of the Year by Honeywell and First Alert Professional at the Connect 2013 Conference in Los Angeles, November 7-10.
The award recognizes Vector Security’s performance and growth. The company has been a longstanding provider of Honeywell products across its markets including Florida, New Jersey and through its Authorized Dealer network.
Additionally, Vector Security was given the Circle of Excellence award in recognition of its overall contribution to the security industry.
Ingersoll Rand Completes Allegion Spin-Off
On Dec. 2, 2013, Allegion, formerly the security business of Ingersoll Rand, became a full-fledged independent company and began trading on the New York Stock Exchange under the symbol ALLE. The spin-off was 12 months in the making, after Ingersoll Rand announced it would divest its security business in December of 2012. During that year, the business’ leadership team which has stayed fairly intact with some additions, diligently worked on the infrastructure necessary “to stand up a $2 billion startup,” commented Tim Eckersley, senior vice president of Allegion and president of the Americas region. One of the key new additions to the executive leadership team was Dave Patratis, chairman, president and chief executive officer of Allegion.
Allegion will conclude the current period under Ingersoll Rand at approximately $2 billion in sales. The company employs 78,000 people globally and plans to add 300 jobs in the next year, including 150 new jobs in the United States. Its Americas corporate center will remain in Carmel, Ind.
“From the perspective of our channel and our customers, the impact of the spin-off is virtually non-existent,” Eckersley explained, adding that as far as the way the company goes to market, its relationships with customers and the product development process it uses, it’s all “virtually untouched.” He continued, “We have always been dedicated and focused on the security systems integrator market. Our customers come from all forms of that industry. They’ll continue to enjoy the same quality of products from virtually the same people that they have for many years. We don’t see any impact whatsoever on a going forward basis other than the fact that we will have an opportunity as a company to be more focused on the security business.”
That focus, Eckersley said, will accelerate the roadmap for Allegion and allow it to concentrate more on the needs and requirements of its customers than it was able to as a part of Ingersoll Rand. “As a public company, we will generate somewhere in the neighborhood of $150 million of free cashflow a year that we will use to invest predominantly in the security marketplace,” Eckersley said.
Eckersley added that Allegion will primarily invest its free cashflow to grow the business organically in addition to dividend distribution as part of its shareholder activity and making targeted acquisitions to grow its product portfolio or geographic reach.
In addition to more focused investment, Eckersley said Allegion will be more nimble, flexible and aggressive in its attack of the market opportunities it believes exists in the security industry.
“We see the opportunities in the market to be substantial on a global basis,” Eckersley said. “Here in the United States we see the opportunity for growth being significant in two specific areas. The first is in our legacy mechanical world where we believe there are a number of product categories and market segments where we can accelerate our investment and growth. Secondarily, [we see opportunity] in the electronic access control space where we’re just getting started in our growth platform for electronic access control. We’re working with some of the systems integrators and OEM partners out there in extending our already market-leading control locking platforms, accelerating our credentialing platforms in the marketplace. And we’re taking what we see as an early stage market where about 10 percent of commercial openings are electrified and secured by access control to something that should be north of 80 percent if we can drive the growth and expansion of both the product and the channel.” — By Sabrina Gasulla, Associate Editor
Convergint Expands in N.A. & Asia With Two New Acquisitions
Convergint Technologies, Schaumburg, Ill., acquired ICD Security Solutions, a provider of physical security services in the Asia Pacific region, Dan Moceri, chief executive officer shared with SDM in late November. Two weeks later, the company announced its further expansion into Eastern Canada with the addition FSC.
Throughout its twelve years, Convergint’s growth has been primarily organic. Earlier this year, with the acquisition of Qualified Systems, Convergint kicked off a new era in which it will pursue growth more aggressively through tactical acquisitions with the backing of KRG Capital.
ICD, founded in 1997 in China, brings approximately $30 million in revenue to Convergint as well as 12 office locations in seven countries. Convergint plans to retain 100 percent of ICD’s more than 200 colleagues as well as its leadership team, Moceri said.
Moceri noted that a significant portion of Convergint’s business involves servicing global customers, so the integration with ICD will be instrumental in the company’s move to serve this client base through an international presence. He also noted that the focus of this expansion is not exclusively on strategic accounts.
”The acquisition of ICD is a significant first step in developing our world-wide service delivery platform,” according to Moceri. He added that Convergint and ICD have been partners for several years through the Convergint Connect initiative.
That partnership was key in Convergint’s confidence in the success of this acquisition. By working alongside ICD for years, the company observed a company culture that aligned nicely with Convergint’s as well as high levels of customer satisfaction, a team that excelled at day-to-day processes, excellent business development and admirable depth in the leadership team. Moceri also shared that though ICD’s recurring monthly revenue piece is not as big a percentage of total revenue as it is for Convergint, it does have a very significant repeat customer piece.
“Joining Convergint is an exciting new development for ICD. Together we can bring significant benefits to those companies desirous of a single global solutions partner that can provide consistent support across multiple regions. We look forward to working together with the Convergint team to deliver unmatched global support and service to each of our valued clients,” said Ron Efron, CEO of ICD Security Solutions.
FSC is a provider of physical security systems and services throughout Eastern Canada and was founded in 1982 by its current chief executive officer Sam Shalaby. Convergint Technologies and FSC will integrate their two businesses located in Toronto and Ottawa resulting in one of the strongest physical security solution and service providers in Eastern Canada, Convergint stated.
“We continue to evolve our capabilities to service customers on a worldwide basis, and the addition of FSC’s 38 colleagues strengthens our position in Eastern Canada,” said Moceri. “FSC and Convergint also share similar company cultures which makes the integration of our two organizations a natural fit,” according to Moceri.
“Convergint and FSC have partnered together over the past several years supporting each other’s delivery of services across Canada. FSC also has a strong federal government customer base, and a ULC listed certified monitoring center that complements Convergint’s long-term growth strategies,” according to Shalaby.
Moceri observed that many acquisitions fail because of two reasons: incompatible company culture and poorly executed integration. Convergint’s acquisition philosophy is centered on looking at companies uniquely, not disturbing the status quo, working with the existing management for a smooth transition in order to be able to capitalize on the strengths that attracted Convergint to it in the first place. “We expect to learn just as much from them as they can learn from us,” Moceri concluded.
Tony Varco, vice president, Electronic Security Division, also noted that the focus of this expansion is not exclusively on large strategic accounts. “There are two things that happen at every one of our locations including, now, in the Far East: trying to dominate that local market, going after universities, schools, healthcare institutions — no different than here. And then the one-two-punch is this idea of an overlay of strategic accounts that are larger, global clients.”
Up until its partnership with KRG Capital, Convergint had only gone after a select few small acquisitions. “Even though we were very healthy, we didn’t have the financial resources to do some significant acquisitions such as ICD,” Moceri noted.
Roughly two years ago, Moceri and the rest of Convergint’s leadership team began carrying out a new expansion strategy for the company that consists of six areas of focus: its Quad Four vision, government business, strategic accounts business, acquisitions, leveraging the “Convergint Nation” through collaboration and knowledge sharing, and succession planning coupled with colleague development. — By Sabrina Gasulla, Associate Editor
Universal Protection Security Systems Acquires THRIVE Intelligence
Universal Protection Security Systems, a division of Universal Services of America, announced it acquired THRIVE Intelligence. Using a combination of analytics, technologies and real-time monitoring, THRIVE Intelligence operates a centralized command and fusion center out of the Dallas/Ft. Worth Metroplex.
According to the company, the acquisition of THRIVE Intelligence will allow Universal Protection Security Systems the ability to expand its national command center and provide the most advanced proactive security surveillance solutions available.
“The acquisition of THRIVE Intelligence is part of our overall strategy to provide our clients with a “total security” solutions approach where we deliver more services and value to our clients than any other security provider is capable of,” said Steve Jones, chief executive officer of Universal Services of America. “We are excited to be able to roll out this service offering to all of our clients across the U.S. and to lead the way in how security services operate in the future.”
Ty Richmond, Security Systems & Technology and National Accounts president of Universal Services of America, added, “The addition of THRIVE Intelligence to the Universal portfolio provides a key strategic end-to-end technology solution that delivers cutting edge-based video camera analytics and monitoring services. This capability is key to our new risk mitigation monitoring and response service, and will bring tremendous value and efficiencies to our current customer base and future clients.”
As it moves ahead with its recent expansion, Universal looks forward to continuing to provide their clients with the best security solutions and systems, personalized customer service and exceptional value available.
“On behalf of THRIVE, we are thrilled to be onboard with a team that has such great vision like Universal,” said Rick Cook, EVP of THRIVE Intelligence. “With them we have the potential to change the landscape of the security industry and its technology, and I’m excited to see what will come.”
Blue Ridge Communications to Offer Connected Home Management Services
Blue Ridge Communications, Palmerton, Pa., and Comporium, Rock Hill, S.C., announced that Blue Ridge Communications joined the Comporium Security, Monitoring and Automation (SMA) Dealer Program to deliver a premier home management solution to the communities it serves.
The solution combines a security alarm system, communications gateway and home automation platform into one device.
“Our customers will have a total home management solution that gives them remote control access to lighting, appliances, thermostats and enhanced video monitoring through their smartphones, PCs and tablets,” said Mark Masenheimer, vice president of operations at Pencor Services Inc., parent company of Blue Ridge Communications. ”Our experience and resources in home security services are compatible for the award-winning iControl Networks platform and Comporium’s proven program.”
Blue Ridge Communications, the nation’s 19th largest cable TV operator, serves more than 170,000 residences in northeastern and southeastern Pennsylvania. Comporium, a diversified communications company, offers a fully managed solution for the connected home. In the summer of 2011, Comporium, which has its own central station, began offering connected lifestyle services including security to its customer base with the iControl platform. The company also is a reseller of the iControl platform to its tier 2 and tier 3 telecom and cable providers as part of its dealer program, according to Lehman.
“We honestly feel that our Dealer Program and Blue Ridge Communications are a perfect fit, because it will integrate so seamlessly with Blue Ridge’s infrastructure while lifting their existing security business to the next level,” said Comporium SMA Dealer Program Vice President Dan Lehman.
COMPANIES YOU SHOULD KNOW
24-7 Security Intl., a dealer program based in New York, got its start in 2008 under the name OnlineAlarmQuotes. In August of 2012, the company rebranded as 24-7 Security, and OnlineAlarmQuotes remained as a lead-generation service. Tom Fowler, president and chief executive officer of the company, set out to create a program that broke industry conventions such as charge-backs, account quotas, caps on commercial accounts, infrequent funding, and more. SDM spoke with Fowler and two of the dealers in his program to learn more.
One of the cornerstones of the program, Fowler explained is: “We don’t charge for credit checks. We don’t do charge-backs. The monthly fee is the end user’s responsibility. Dealers are not my bill collectors. If a customer doesn’t pay, shame on me for buying a bad contract.”
Other differentiators for the company are that it accepts renters and places no limits on the numbers of commercial accounts dealers can sell.
Another stand-out feature is that the 24-7 Security program provides daily funding. In the majority of cases, if a dealer sends paperwork on the morning of any given day, the money will be in that dealer’s account the following morning.
“We’re not in business to take over or to put dealers out of business,” Fowler said. “We’re not their boss. We’re looking for very long term partners.”
Fowler stressed that part of that partnership building means adding the most value possible for dealers so that the annual fee of $1000 to belong to the program is offset quickly. “We don’t take kickbacks on equipment,” Fowler said. “Rebates are passed on to dealers.”
Fowler highlighted that 24-7 Security will buy accounts often underappreciated by the industry. “Alarm companies fear renters,” Fowler added. “But our banks are behind us so we can take on slightly riskier accounts. Our portfolio performs over 95 percent… We can purchase up to $100 million a month in contracts. That’s the line we have with the banks.”
The program protects territories, allowing a certain number of dealers depending on the market and checking with existing dealers first. There are currently about 150 dealers in the program and the selection process is somewhat out of the norm, Fowler said. — By Sabrina Gasulla, Associate Editor
Editor’s note: To read the full story, visit: www.SDMmag.com/CYSK-247Security
Leviton, Melville, N.Y., hired Thomas Morgan as the director of product management for the Security & Automation business unit. In his new role, Morgan will be responsible for helping to strategically guide the future of Leviton’s smart, integrated products, including the Vizia RF+™ Z-Wave® product family.
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Pelco by Schneider Electric, Clovis, Calif., promoted Stephanie Mayes to the position of vice president of North American Sales for Schneider Electric’s Pelco Video Line of Business. Mayes has a long history of stellar performance within Schneider Electric and within the security industry. She joined Pelco in 2011 as the director of strategic account sales.