After Integrated Alarm, who’s next?

SSN Staff  - 
Monday, September 1, 2003

ALBANY, N.Y. - As reported in the August issue of Security Systems News, there was more riding on Integrated Alarm's initial public offering than the health of just one company.

Between the stock market itself being in a down time and capital in the security industry hard to come by, the industry has taken a "wait and see" approach to Integrated Alarm's IPO as a sort of bellwether for the rest of the industry. So far, the lesson of Integrated Alarm seems to be a positive one, according to John Mack of USBX Advisory Services.

"All power to them for having gotten a significant IPO done in what is still essentially a tough market," he said. "It's helpful to the industry to see that kind of equity capital come into the alarm industry."

Tom Few Sr., chairman and chief executive officer of Criticom, understood the pressures the industry had put on his company and said Integrated Alarm has shown others that big deals are possible in the monitoring business, as well as in related industry segments.

"The successful completion of this is certainly good for us and good for our dealers, but I think it's also good for the industry," he said. "This industry has had not a whole lot of good press over the last five or six years, and not a lot of success stories. And capital was getting tighter and tighter. I would hope and I believe that this successful transaction will open doors industry-wide with capital and I think we may see some more of this going down the road, and that's healthy for all our businesses."

Integrated Alarm's underwriter in the deal was Arlington, Va.-based Friedman, Billings, Ramsey. Shortly after the IPO, FBR had risen to the top of the IPO lead manager sector with three IPOs valued at $1.1 billion this year, charging ahead of traditional leaders like Citigroup, Credit Suisse First Boston and Goldman Sachs, according to Reuters.

A company spokesman said FBR, which focuses on mid-sized companies, got involved in the Integrated Alarm deal because it recognized the potential not only for Integrated Alarm but for the industry as a whole.

"We believe this transaction marks the first recapitalization of a major player in this sector of the security business, yet is not dissimilar to a number of our other financial services underwritings," said Emmanuel Friedman, co-chairman and co-chief executive officer of FBR, said in a statement on the IPO.

Few said his company is glad to have the IPO process behind it, and added that he would like to see other companies find the means to do the same.

"I’m not out harvesting new competitors but the reality of this is that you need a healthy industry, and I think this may play some part in it," he said.