Tyco’s Westfire buy to enhance SimplexGrinnell
NEUHAUSEN, Switzerland—The addition of Westfire to the Tyco family will complement and enhance SimplexGrinnell, another Tyco business, and bring it more customers and RMR opportunities, according to SimplexGrinnell officials.
“Where we [SimplexGrinnell] are strong, they [Westfire] are not. Where they’re strong, we’re not, so it’s really a nice, additive, complementary partnership,” Stan Klakulak, Simplex Grinnell regional manager for the Southwest and mountain regions, told Security Systems News.
Tyco announced the buy of the $80 million Westfire on Nov. 14. Westfire’s five U.S. offices are concentrated in the Western states—in Arizona, Colorado, Texas, Utah and Washington—and it also has operations in Chile and Peru. It provides special hazards suppression and detection applications in vertical markets such as mining and telecommunications, according to Tyco. Westfire’s services include fire hazard analysis, system design, installation, maintenance and testing.
Klakulak said that because “the Westfire name is pretty strong relative to special hazards applications,” Tyco Westfire will be co-branded with SimplexGrinnell in the United States.
Chris Woodcock, director of marketing communications for Westminster, Mass.-based SimplexGrinnell, told SSN that the plan is to “simply use the Tyco SimplexGrinnell logo … side-by-side with the Westfire logo, so it would really be co-branded between the two organizations.”
SimplexGrinnell works in the same special hazards verticals—such as the mining sector, where SimplexGrinnell does work in Canada, Colorado, Arizona and Utah—as Westfire does, but not to the same extent because SimplexGrinnell has only entered those markets in the past couple of years, Klakulak said.
SimplexGrinnell has its own “unique special hazards team that does high-end, complicated special hazards systems, [which is] based out of Cleveland, Ohio and has multiple remote resources throughout North America.” That team focuses on oil, gas and energy applications, which are not a focus of Westfire, Klakulak said.
So, he said, having Westfire in the Tyco family now is “a very big enhancement [to SimplexGrinnell]. … This adds depth to that [special hazards team when it comes to Westfire’s expertise in telecom, data storage and mining applications], so it’s really very complementary and it expands our customer base with Westfire’s own customer base.”
Also, Klakulak said, Westfire’s work in the United States is 65 percent special hazard installation and 35 percent recurring revenue for services post install.
Westfire has left that RMR work to subcontractors when it does work outside its geographic locations, Klakulak said. However, he said that should change now because SimplexGrinnell has 140 regional offices throughout North America. “For the RMR component, where they’re doing work outside their geographies, we become that service agent locally at SimplexGrinnell,” he said. “… [That is] something I think will be really, really nice ROI in the future.”
After Tyco shed its ADT home security and flow control businesses last year, it became a pure-play fire protection and security company, of which SimplexGrinnell is a key part. SimplexGrinnell recently won a new multiyear contract that could generate up to $10 million a year for that business.
Tyco has more than $10 billion in revenue and in excess of 70,000 employees in more than 1,000 locations across 50 countries. It serves markets that include commercial, institutional, governmental, retail, industrial, energy, residential and small business.