SSI serves security installing contractors providing systems and services; surveillance, access control, biometrics, fire alarm and home control/automation. Coverage in commercial and residential product applications, designs, techniques, operations.
Issue link: https://securitysales.epubxp.com/i/166764
Industry Pulse NEWS ADT TO LEVERAGE DEVCON EXPERTISE IN HOA SALES MODEL Alarm Industry Wins Court Battle in Illinois BOCA RATON, Fla. — ADT Corp. has reached an agreement to acquire Devcon Security for $148.5 million, a deal analysts say will expand ADT's ability to ofer interactive services to homeowner associations. Established in 2004, Hollywood, Fla.-based Devcon operates in South Florida, New York and Utah. Acquired by San Francisco-based Golden Gate Capital in 2009, the frm operates two central stations — one ADT's deal for Devcon in Staten Island, N.Y., and the other in Security brings it $3.6 Hollywood, Fla. million in recurring monthly revenue. Te deal comes with 117,000 accounts and $3.6 million in recurring monthly revenue (RMR). Jef Kessler, managing director at Imperial Capital, which advised Devcon on the transaction, tells SSI ADT will see a 2% increase in its subscriber base and a 1.4% increase in RMR. "I believe this transaction can bring more than that to ADT because the average annual RPU [revenue per user] of Devcon is in the low $30s, whereas ADT is well over $40," he says. "Over time, they can bring the RPU up toward the ADT average, and that's a large amount of growth right there." Devcon's unique density in Florida and New York is expected to help ADT create synergies and improvements in service capabilities that should boost the transaction's margins materially, according to Kessler. ADT will also look to leverage and refne the homeowner associations (HOA) sales model, which is a particular specialty of Devcon's. Te company is said to have one of the largest businesses built around HOAs in the alarm industry. "Cluster living and gated communities with city centers are a growing national trend," says Sandy Jones, principal of Sandra Jones & Co. "As a pioneer in working with HOAs, Devcon's experience might be an excellent long-term national sales model that increases the RMR per customer for ADT." CHICAGO — A federal appeals court has upheld a ruling in favor of ADT, Alarm Detection Systems (ADS) and three other private alarm companies, stating that the Lisle-Woodridge Fire Protection District (LWFPD) could not monopolize the fre alarm monitoring market. The decision is one victory in a yearslong legal battle against LWFPD, which issued an ordinance in 2009 that positioned the district as the lone fre monitoring entity in the area. Under the ordinance, the district required all commercial and multi-residential alarm system owners to solely use Keltron transmission devices supplied by the district. In 2010, ADT and ADS, along with D.M.C. Security Services of Midlothian, Ill., Illinois Alarm Services of Forest Park, Ill., and SMG Security Systems of Elk Grove, Ill., fled a lawsuit against LWFPD, charging violations of the Illinois Fire Protection District Act, federal antitrust regulations and applicable codes and standards. "The whole point of the lawsuit was to preserve the right for alarm companies to use their own monitoring facilities so they could keep track of trouble and supervisory signals," Bruce Goldsmith, an attorney for law frm Dykema, which represented four alarm companies in the lawsuit, tells SSI. "When the district was monitoring, nobody communicated with the owner. If they did inform the consumer, it was unclear who was responsible for handling the problem." Vector Security Acquires Retail Managed Services Specialist STUDY: U.S. SECURITY INDUSTRY VALUED AT $350B PITTSBURGH — Vector Security will acquire Industry Retail Group (IRG), a provider of managed network services, to help accelerate its move into the complete managed infrastructure and business intelligence space. Terms of the deal were not disclosed. Bethesda, Md.-based IRG provides broadband and broadbandcentric services, such as hosted VoIP, hotspot and enterprise Wi-Fi solutions, and IP video solutions, to Fortune 1,000 retailers, quickserve restaurants and convenience store chains. Vector Security will now have access to IRG's more than 75 retail and multisite clients, including some well-known brands such as American Eagle Outftters, Macaroni Grill and Swarovski. With the average IRG customer having between 400 to 1,200 sites, the deal positions the company as a single-source provider of custom tailored solutions, rather than customers seeking out multiple vendors, Vector Security CEO Pam Petrow tells SSI. "There is a great opportunity for cross-selling between both companies," she explains. "IRG's industry-leading network solutions, coupled with Vector Security's physical security solutions and analytics allows us to provide customers with business intelligence that no other security vendor can provide." ALEXANDRIA, Va. — Te U.S. security industry market is worth $350 billion, according to a recent report by ASIS Int'l and the Institute of Finance and Management (IOFM). Private sector spending makes up the bulk of the market, bringing in $282 billion. Federal government spending on homeland security follows behind, accounting for $69 billion of the industry, according to the study, titled "Te United States Security Industry: Size and Scope, Insights, Trends, and Data." More than 400 security industry executives participated in the survey, which provides an analysis of the security products and services market, as well as the industry's personnel market. A secondary survey included responses from security manufacturers and vendors, security services providers, dealers, distributors, installers and integrators. Te report estimates the operational (non-IT) private security spending at $202 billion with expected growth of 5.5% in 2013. Meanwhile, the IT-related private security market is worth roughly $80 billion with projected growth of 9% for 2013. 18 / SECURITYSALES.COM / SEPTEMBER 2013