Franchisees see sale as positive

Thursday, April 1, 2004

ALEXANDRIA, Va. - While some in the industry may question Tyco Fire & Security’s announcement that it was in talks with a number of potential buyers for Sonitrol, the mood among a number of Sonitrol’s franchisees is one of optimism.

Leo Wanstreet of Sonitrol Tri-County in Farmington Hills, Mich., has been a Sonitrol dealer since 1987. He said the parent company has been mum about the sale, but he’s optimistic that it will be positive for franchisees.

“There hasn’t been a whole lot said about it, but I think generally, the feeling is that it’s going to be a good thing,” he said. “It wasn’t a very good fit with Tyco.”

One franchisee, who asked that his name not be used, went a step farther, suggesting that Sonitrol’s relationship to Tyco may actually have hurt business.

“There’s a negative perception out there about Tyco that mostly comes from the stories about [former Chief Executive Officer Dennis] Koslowski,” he said. “I think we’ll all benefit from a fresh start under a new company.”

At press time, a deal was expected to close by the end of April, although neither Sonitrol nor Tyco would comment on potential suitors.

Because a deal had not closed, Ellen Koh, Sonitrol’s director of communications, deferred all comment to Tyco. At press time, according to Deb Coller,

vice president of communications for Tyco Fire & Security, there had been no movement on the divestiture beyond the initial talks with potential suitors.

Sonitrol’s 170 franchisees serve an estimated 180 cities in the United States, Canada and the United Kingdom. They sell, install and service security systems based on Sonitrol’s technology.

In a conference call with investors in February, Tyco Fire & Security Vice President David Robinson said Sonitrol had generated a lot of interest.

“We had great interest in it because it’s a great business,” he said. “It’s going to do very well with a new buyer fairly soon.”

As for what franchisees can expect after Sonitrol is sold, Wanstreet said there hasn’t been much news on that front either.

“There’s just been conjecture on the part of the dealers,” he said. “The main line is that things will be divulged after the deal is closed and everything is final.”

Tyco acquired Sonitrol, which has been in business since 1963, in 2001. The main reason for the divestiture, Robinson said, was a conflict with Tyco’s ADT unit.

Sonitrol’s strength, said industry watcher Lee Jones of Support Services Group, lies in its track record for assisting police in capturing criminals. According to Sonitrol’s website, since 1977, the company has contributed to more than 145,000 apprehensions using its audio verification technology.