Panasonic to buy Sanyo

Well, it looks like the rumors and speculation had merit: Panasonic has made a formal offer to purchase Sanyo.

Not surprisingly, the WSJ doesn't mention either company's security divisions, as they are small pieces of a very large puzzle, but I found this paragraph particularly interesting:

For Panasonic, the deal comes down to Sanyo's green technology products. Sanyo, the world's largest producer of rechargeable batteries for laptop computers, digital cameras and mobile phones, is poised to capitalize on the auto industry's shift to hybrid and electric cars.

Maybe people remember Sanyo's solar-powered "green" cameras at IFSEC 2007? I'd of course love to see Panasonic embrace green practices in the security industry as part of this greening of the company in general.

Still, this deal isn't exactly done yet:

Panasonic said it will commence by the end of February a tender offer for Sanyo shares at ¥131 ($1.50) each, a 4% discount to Sanyo's Friday closing price of ¥136. Panasonic plans to issue up to ¥400 billion in debt from next year to finance part of the acquisition.

A lot of things can happen between now and February.

NAPCO buys Marks

Fairly big news in the lock world today: NAPCO has agreed to buy Marks USA for $25 million.

NAPCO's not huge, doing about $65 million annually right now, but it's being aggressive and has had some fast growth in its recent past. Plus, it's starting to show some nice profitability, with a roughly 20 percent net margin in its most recent report.

However, revenues have been relatively stagnant for the past year or so, so it's not surprising the company looked for some non-organic growth.

Marks pretty much is what it is: a company that makes locks. I'm not sure how impressed I am with a little under $4 million in net income on $25 in revenue. I would have guessed higher than a 16 percent net margin for a well established private manufacturer, but I don't totally know what I'm talking about there.

Stanley to buy Sonitrol

Well, we told you they were back in acquisition mode.

Stanley Works announced just now an agreement to acquire Sonitrol for $275 million, at the same time they announced an agreement to sell off CST/berger laser leveling and measuring business, based in West Lafayette, Indiana, to Robert Bosch Tool Corporation for $205 million. Busy, busy.

Here's the official press release (it's long and dense):

STANLEY WORKS ANNOUNCES SALE OF CST/BERGER FOR $205 MILLION AND ACQUISITION OF SONITROL CORPORATION  FOR $275 MILLION

(sorry, many press releases shout and I was too lazy to retype it)
 
Also Plans To Prune Several Small, Non-strategic Product Lines During The Remainder Of 2008
 
New Britain, CT, June 11, 2008: The Stanley Works (NYSE: SWK) today announced that it has entered into an agreement to sell its CST/berger laser leveling and measuring business, based in West Lafayette, IN, to Robert Bosch Tool Corporation for $205 million.  This operation had 2007 revenues of $80 million (excluding certain European sales of approximately $10 million), primarily in North American construction-related markets.  The transaction, which has been approved by the Boards of Directors of Stanley and Bosch, is subject to regulatory approvals and other customary conditions, and is expected to close during the next several months at which time the company expects to realize a pre-tax book gain totaling $138 million.  Net after-tax cash proceeds from the sale are expected to approximate $155 million.

We've heard in the past Stanley is looking to get away from revenue stemming from product sales and emphasize recurring revenue.

In a separate transaction, the company also announced that it has entered into an agreement to purchase 100% of the shares of Sonitrol Corporation from an ownership group comprised of Carlyle Venture Partners, Wachovia Capital Partners and Spire Capital Partners as well as selected members of Sonitrol management for $275 million cash (approximately 10x EBITDA). Sonitrol, headquartered in Berwyn, PA, provides security monitoring services, access control and fire detection systems to commercial customers in North America via two monitoring centers and a national multi-channel distribution network. Sonitrol, the 8th largest electronic security company in the U.S., brings a strong brand, unparalleled capabilities in audio-verified monitoring and a substantial national account base to Stanley’s Convergent Security Solutions platform.  Sonitrol, with revenue totaling approximately $110 million will report into Stanley’s Convergent Security Solutions business which had 2007 revenues approaching $600 million.  The Boards of Directors of Stanley and Sonitrol have approved the transaction, which is subject to regulatory approvals and other customary conditions. The acquisition is expected to close during the third quarter of 2008.   

Have to admit I just read that Sonitrol was for sale on Jeff Kessler's blog, which is now a must-read, considering his in-depth knowledge of the industry and now being released from Lehman Brothers' lawyers' shackles. However, you'll notice I had this here news posted first...
 
John F. Lundgren, Chairman and Chief Executive Officer, commented: “These two transactions are important steps toward advancing our growth strategy and repositioning the company to be less dependent on construction and DIY markets.  We continue to be strongly committed to shifting the company’s portfolio into higher-growth, higher-return areas such as electronic security.  The addition of Sonitrol, with its iconic brand and strong franchisee and direct sales network, expands the scale of our existing North American monitoring operation, increases our recurring revenue and adds breadth and depth to our electronic security product offering.”
 
Exit of Several Small, Non-Strategic Product Lines
In addition to the two transactions announced today, the company is developing plans to exit several small, non-strategic product lines during the remainder of the year with associated revenues of approximately $60 million. Assuming that these exits are accomplished through discontinuation or sale at various times throughout the year, their results will be reclassified to discontinued operations for the current and all prior periods in accordance with generally accepted accounting principles as events transpire.  Details of these exits will be communicated as necessary after plans are finalized and/or transactions occur.

...boring stuff...

John F. Lundgren, Chairman and Chief Executive Officer, continued: “The portfolio transformation which we embarked upon several years ago is a key element of our overall strategy and includes both acquisitions and the occasional disposition of businesses or product lines that are inconsistent with our intended direction.  As the portfolio reshaping has progressed, the company has become stronger and more capable of delivering sustainable earnings and cash flow growth.  Today’s announcement reinforces our firm conviction to continue with this strategy.  Challenging economic periods like these often present opportunities.  Our acquisition pipeline is robust and our ability to create value by allocating capital to acquisitive growth and/or share repurchase is strong.  We continue to operate the company within the boundaries of our upper-tier credit ratings, a strategy which has served us well over the years and will continue to do so. “
 
Additional Information About Sonitrol

Sonitrol, a market leading independent U.S. commercial security company, had 2007 revenues of approximately $110 million.  Sonitrol is well positioned for growth given its integrated suite of security solutions, its established brand and respected reputation and its national multi-channel distribution network.  Sonitrol, an industry leader in apprehension rates, maintains one of the lowest false dispatch rates in the market, and is a leader in verified audio monitoring services.
Recurring monthly revenues (“RMR”) from commercial monitoring activities represents an important element of Sonitrol’s annual revenues; additional revenues are generated from security system and equipment installation, repair services, proprietary equipment sales and royalty fees generated from Sonitrol’s franchisees. A one-time installation fee (including the cost of equipment) is billed at the commencement of customer security contracts. Additionally, monthly monitoring fees are charged over the life of contracts, for which a typical initial length is five years, and service fees are generated from repairs that are not covered by warranty.

Yeah, I think Sonitrol does pretty well and did pretty well for its investors. Getting $275 million for $110 million in annual revenue isn't that far away from Stanley paying $545 million for the $200 million HSM brought (both deals are in the 2.5-2.75x annual revenue, 10-12xEBITDA, 50-60x RMR areas, with Sonitrol a touch lower than HSM in all of those categories). I'm guessing Sonitrol are similarly doing about 50 percent of their revenue in recurring and that their gross margin is somewhere around 30 percent, maybe higher.

I'll get some more on what's happening with the brand, whether HSM is going to keep the residential accounts, and what's up with the franchises soon. I'm going on a little vacation starting tomorrow, though, so it might take a bit.

United Protection to buy mystery firm

United Protection is a guarding/integration firm trying to make some noise in western Canada and has been slowly moving toward the U.S. market, apparently by starting with the guarding business. They hired former CEO of Rentokil Initial Canada Don Allan in 2006, struck a deal with Convergint for some high-level integration work last year, and now are making their big play:

They've signed a purchase agreement for a company in the southern United States doing more than $100 million annually. Which one? They're not saying yet. It's a mystery.

No wonder people aren't in love with the guarding business here in the States, though. Look at the financials on this deal:

[T]he Company has entered into a share purchase agreement to acquire a 75% interest in a private security services company based in the Southern United States (the "Target"). The consideration to be paid for the interest in the Target will consist of: approximately USD $15.6 million to be paid in cash; approximately USD $3.1 million in the form of a convertible vendor financing note; the assumption of approximately USD $7.2 million in indebtedness; and other liabilities which amounts will be confirmed prior to closing. Under the terms of the agreement, United Protection also has a five-year option to acquire the remaining 25% interest at a defined valuation multiple. The acquisition, which is anticipated to close on or before May 30, 2008, is expected to be funded through a new equity financing by United Protection.

During the 2007 fiscal year, United Protection had revenues of approximately $22.5 million, net income of $0.6 million and earnings before interest, taxes, depreciation and amortization ("EBITDA") of $1.2 million. During the same period, the Target had revenues of approximately $98.7 million, net income of $4.8 million and an EBITDA of $9.0 million. United Protection is currently in the process of conducting due diligence on the Target's financials.

So, you can get 75 percent of $100 million in guarding revenue for less than $20 million and the assumption of $7 million in debt? There's something I'm missing. Net income of $4.8 million should cost more than that, it seems to me, but I'm new to the world of guarding acquisitions.

Looks like that $500 million came in handy

Interesting to look back on our story about Tyco taking out a $500 million line of credit following its split-up last year.

There was some debate about what the money might be for:

Paul Fitzhenry, Tyco spokesman, did not have any further comments on the line of credit. However, industry analyst Jack Mallon, managing partner of Mallon Associates, noted that taking a $500 million line of credit is not something a company does just as a matter of course: "The company's been in a holding pattern for the past three years. They have talked somewhat about acquisitions but haven't delivered in the security area."

Is that about to change? "Perhaps," Mallon said.

"The time is right [for expansion and acquisitions] and the opportunity is there," according to Mallon. Tyco may have secured the credit line for the purpose of starting a "more aggressive growth program," he said. He tempered this speculation, however, saying there may be "another factor, they may be contemplating some other capital expenditures."

I guess $187 million is kind of chump change for Tyco International, but it does make me feel like we sort of called that.

Some ADT-FirstService analysis

At first blush, I thought the ADT purchase price for FirstService's security business was something of a steal. They paid (an announced) $187 million for a business that did roughly $200 million in revenue last year (theoretically - it's not broken out on FirstService's financials). So, less than 1x 12 months trailing revenues, that's pretty good, I'm thinking.

But then Frank Brewer said that only about 10-11 percent of that revenue was service-based. So, that's $22 million on the high side, which is just $1.83 million of RMR (theoretically - hard to know what of that is contracted and what is one-time fees). So, if you calculate as a multiple of RMR, you've got $187m/$1.83m of RMR, which leaves you with a multiple of 102x. Obviously, this isn't an RMR-based business, and ADT is keeping the management (FirstService Security CEO Frank Brewer will be the head of a new integration division at ADT) and a lot of clients and expertise, but there's still no guarantee that SST and Intercon will continue to create new business at their past rates, and there's likely to be at least some attrition in the sales and engineering forces, as there can be during an acquisition.

Now I kind of wonder if ADT overpaid a bit, especially in this economy. Money people, feel free to tear me down.

We're back!

Okay, I know a lot of you have been jonesin' for your daily security-blog dope and we've been disappointing you for the past week. Sorry about that. It's a long story, involving Russians, IT guys working late nights, and lots of desk-pounding and cursing (also a fair amount of irony, but I won't get into that). Suffice it to say, we're back, and plenty of stuff has been happening in the meantime. You'll see fleshed out versions of many of these stories on the newswire later today, but here's a quick recap:

Aronson Security Group bought Selectron, establishing a real northwest powerhouse of an integrator. At the same time, they established a convergence division that a lot of your are going to want to take a look at for the purpose of stealing ideas. These guys seem to get that companies want one security guy who handles everything (you know, like making sure the Russians don't get you).

Assa Abloy bought Simons Voss. When I first heard this, I thought it was a little bigger deal than it actually is. Simons Voss makes some really cool wireless locking systems, don't get me wrong. I just thought they were a bigger company due to the enormous booth they had at the Essen show in 2006. Turns out they only do about $60 million a year. Still big, I guess, but not huge (especially in the scope of Assa Abloy). Also, Assa's going to let Simons do their own thing, so don't expect much to change, which is a good thing.

March Networks bought Cieffe, a company from Italy you may not have heard of, but which makes some great IP video technology. They've only recently come to North America - Kolossal Technologies might be their only North American dealer. It's hard to say. But the combination of March's IP stuff for retail and banking and Cieffe's stuff for commercial/industrial applications makes for a very interesting manufacturing partner for progressive integrators. Plus, they've really got a nice global reach at this point.

GE Security bought most of CoVi's assets, signaling a commitment to IP video solutions. Apparently it was quicker to just buy assets instead of CoVi proper, which means GE Security doesn't get the brand (but, as one GE official said as an aside, "I think we've got plenty of brand already"), and the executive staff doesn't come with the deal. They'll be busy honoring warranties and answering questions, most likely. What does come with the deal are all of the engineering and product support types-the brain power behind the technology. If there's one thing I've learned about GE, it's that they love to collect PhDs.

More later, but that's probably enough for now.

Argyle buys three companies

Argyle Security, a rapidly growing international integrator born out of the San Antonio-based ISI, has announced three buys just now. The total purchase price is $14 million, so none of them is a big move, but they have collectively caused the company to up its revenue projections from between $105 and $115 million to between $128 and $142 million.

If they're paying $14 million for about $25 million in year one revenue, that's not too bad, right?

I'll have more about this on the wire Thursday.

L-1 to buy Bioscrypt

News just came over the wire that L-1 has entered into a definitive agreement to buy Bioscrypt, recently named the biometric market leader by an IMS study. In a stock-for-stock deal, L-1 will pay about $44 million Canadian, which isn't bad considering the 3Q results you can find here for Bioscrypt.

Basically, the company will do about $20-$22 million in 2008, but lost $10 million in the three quarters ending Sept. 30, 2007. This statment from L-1's version of the release thus seems a little optimistic:

It is expected to be Adjusted EBITDA accretive in 2009.

The cost-savings measures L-1 has planned must be something special, especially considering Bioscrypt will operate as a wholly-owned subsidiary and keeps its current locations.

I'll have more on the newswire Thursday.

Not THAT Risk Management Consultants

It appears that our top newswire story from yesterday has caused some confusion. I don't think it's my fault.

The story was about a top engineering firm, KCI Technologies, buying Risk Management Consultants and with it creating a new subsidiary, KCI Protection Technologies.

Unfortunately, there's another Risk Management Consultants, run by Jim Emerick, which is based in Cokeysville, Maryland, and just two miles from KCI's Hunt Valley offices. Emerick reports being a bit surprised to hear he'd sold his business. He thought it was funny at first, the two companies having the same names, then he got a call from one of his biggest suppliers asking him if he still needed his line of credit. Yikes.

So, to be clear: KCI bought Risk Management Consultants, Inc., a Delware firm founded in 1985 and run by John Fannin, that does mostly engineering and design work in the security marketplace. (Here's a release about it, if you don't believe me.)

KCI Technologies DID NOT buy Risk Management Consultants, LLC, a Maryland firm that services and installs residential and commercial burglar alarm systems, access control systems, CCTV systems and UL-listed fire alarm systems. They also have monitoring through a partner central station, Alarm Watch, also of Hunt Valley.

While we're talking about the non-purchased RMC of Maryland, I can also note that RMC was recognized in 2003 by the Carroll County States Attorney's Office with an "Outstanding Achievement Award" for work with victims of domestic violence, and this past year, for similar efforts, RMC was named Business of the Year by the Maryland Network Against Domestic Violence and took home the 28th Annual Governor's Crime Prevention Award. Congratulations to them on working toward a noble cause.

Apparently, Risk Management Consultants is a pretty popular name for a business. Here's one in Florida. Here's one in the UK. Here's one that serves orthodontists.

I'm sure there are others.

Securitas Systems buys again

The acquisition team at Securitas Systems has been busy, that's for sure. Click on the Securitas Systems label below for the full story, but here they go again.

This time, it's a buy in the Netherlands, Installerende Partners, and it's a relatively small one. However, not only did they announce their traditional 5-7x EBITDA range, they also supplied sales numbers: approximately MSEK 26 (MEUR 2.8). Must be nice making buys in MSEK instead of the rapidly falling dollar.

Anyway, now I can try some math.

Securitas Systems has said they look for businesses approaching 40 percent of gross revenues in service money, but that's unlikely to be the case with a small integrator with only 25 employees, so it's probably more like 25 percent in service. That's going to bring their gross margin down into the 20 percent range, no? (I'm trying out relatively newly acquired business-analysis knowledge here, so please correct me with the comment button below if I'm way off. Remember, I was an English major...)

So, of their $4 million in 2006 revenues, that's $800,000 in gross margin. As a company 20 years in business, it probably doesn't have a lot of financing costs or undue overhead, so we'll back out maybe $100,000 of that and say they've got EBITDA of $500,000. Multiply that by six and you've got $3 million as a purchase price, which is .75x 2006 revenues.

If they have 25 percent of revenues in service, that's $1 million annually, which is $83,333,333 in RMR. So $3 million as a purchase price would be 36x RMR.

What do people think of that?

IR makes big HVAC buy

I'm not sure how this affects their security play, but when you consider the increasing overlap of security and building controls, this may have some crossover.

Truncated release follows. Lots of big numbers (and capital letters, which I hate - stop shouting at me):

INGERSOLL RAND TO ACQUIRE TRANE INC. FOR APPROXIMATELY $10.1 BILLION

• Transaction Creates a Global Diversified Industrial Company with expected Pro Forma 2008 Revenues of  $17 Billion and $2 Billion of EBIT
• Transaction Immediately Accretive to Earnings with Estimated 2008 EPS of $4.00
• Cost and Revenue Synergies are Expected to Exceed $300 million by 2010
• Acquisition Price for Trane of $36.50 Per Share in Cash and 0.23 shares of Ingersoll Rand Common Stock per each Trane • • Share Equal to Approximately $48.00 in Total Value per Trane Share

Hamilton, Bermuda and Piscataway, New Jersey, December 17, 2007 – Ingersoll-Rand Company Limited (NYSE:IR) announced today that it has executed a definitive agreement to acquire Trane Inc. (NYSE:TT), formerly American Standard Companies Inc., in a transaction valued at approximately $10.1 billion, including transaction fees and the assumption of approximately $150 million of Trane net debt. Trane is a global leader in indoor climate control systems, services and solutions with expected 2007 revenues of $7.4 billion.

Under the terms of the merger agreement, which has been approved by the Boards of Directors of both companies, Ingersoll Rand will acquire all outstanding common stock of Trane. Holders of Trane's approximately 200 million common shares will receive a combination of $36.50 in cash and 0.23 Ingersoll Rand shares of common stock per each Trane share. The total value for this transaction was $47.81 per Trane share based on the closing price as of December 14, 2007. The transaction which is expected to close late in the first quarter or early in the second quarter of 2008, is subject to approval by Trane shareholders, regulatory approvals and customary closing conditions.

Herbert L. Henkel, Ingersoll Rand chairman, president and chief executive officer, said, "The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with projected pro forma 2008 revenues of $17 billion. The new Ingersoll Rand portfolio will include an $11 billion Climate Control business which will offer high value equipment, systems and services necessary for delivering solutions across the temperature spectrum for indoor, stationary, and transport applications worldwide.

"As a result of expected revenue and cost synergies, we are confident that this acquisition will improve Ingersoll Rand's future earnings growth potential. We believe the new Ingersoll Rand will be capable of sustaining annual organic revenue growth averaging 5-7% and EPS growth exceeding 15% per year, both in excess of our former growth guidance. In particular, assuming timely consummation of the proposed acquisition, we anticipate earnings of $4.00 per share in 2008."

At the very least, this sounds like something that's going to make IR more profitable, and that could make them more aggressive in the security market in general. Could be less cash on hand for other security acquisitions, though.

Securitas Systems buys Securex

Securitas Systems has strengthened its retail portfolio by acquiring Securex, a division of LP Innovations that focuses on retail security. This comes about three months after its acquisition of PEI.

Here's my favorite part of what's a very short release:

Securitas Systems has purchased the assets of Securex, a division of LP Innovations, Inc. The purchase price is between 5-6x EBITDA.

This is a classic piece of seeming to give information without actually giving information. It's the same way they characterized their PEI deal, as a multiple of EBITDA. And maybe it's a sign they're buying healthy companies, who have solid positive EBITDAs. But a multiple of revenues or RMR would give us a much better idea of the size of the deal, obviously.

Westec buys Digital Witness

Two of the leaders in video monitoring have teamed up as of yesterday, when Westec Interactive bought Digital Witness. Both have made digital video into business continuity plays, mostly in the retail and restaurant verticals (or maybe restaurants are in the retail vertical?), and while they are happy to talk security, they're mostly an ROI sale.

Sound like anything I reported from Securing New Ground? Let this serve as a reminder that there are a number of companies out there working with digital surveillance that don't see themselves as part of the "security" industry, but aren't IT players either. They're simply security folks who don't make the rounds of all the secrurity conferences, necessarily.

Go look at their web sites (here and here) to get the full picture, but these companies are definitely on board with recurring service revenue. Just look at Digital Witness' subscription model. They're getting plenty for the install, I can assure you, but then they're tacking on service/monitoring revenue of, at least, $264 per month on their basic system for a chain restaurant. Are you getting $264 a month from the last quickie-mart install you did?

Our monitoring editor Leischen Stelter will have more on this deal for the newswire next week.

Securing New Ground, day 1

Securing New Ground, right here on Madison Avenue in the Roosevelt Hotel, just couldn't be more New York. If there's a higher Blackberry density at any other security conference I'd be shocked. And it somehow seems very appropriate that the Brooks Brothers store is right across the street.

Anyway, the mix of attendees is very heavy with manufacturers and financial types. I'm told this was once more of an alarm conference, where medium-sized companies came to look for buyers/buyees. Now, it's largely dominated by companies with new technology, along with a slew of high-ranking industry types from both manufacturers and integrators.

Some notes:

• Securitas Direct president and CEO Dick Seger was supposed to present but he was too busy being bought out. Oops. Sure does look good for Securing New Ground, though, as they've clearly identified industry players that the venture and capital world is interested in. Or maybe it doesn't look so good - if they know so much about the M&A market, shouldn't they have known their speaker would be busy today? (Sorry, that was a bad joke - I'm a little punchy down here in the Roosevelt bar, the only place I can get Internet, since the hook-up in my room is busted).

• Joe Nuccio, head of ASG, and Robert Farenhem, head of Devcon, presented together, and it was kind of amusing that Nuccio had just this past Friday bought Matrix and leap-frogged Devcon in annual revenues. Nuccio seemed postively elated. Farenhem looked and spoke like a guy who just escaped a year in the bush. I think Devcon's fortunes are looking up, but it's pretty clear the last year hasn't been a fun one.

• Brett Bontrager, head of Stanley's Convergent Security Solutions business, is a smart guy, without question, and has a good sense of humor, but has a way of talking where his voice rises at the end of every sentence like he's asking a question. I'm not sure why I find that notable, but I do.

• Julie Donohue, head of IBM's security business, predicted sales would jump from $.5 billion to $1.5 billion next year for IBM's security offerings (according to notes taken for me by Anixter's Severin Mulligan - I was busy ironing my suit). That seems ambitious until you realize they group IT and physical security, and they are spending money like drunken sailors.

• The lending professionals did not make me feel good about the economy. The basic message from Gretchen Gordon (CIT), Bill Polk (Capital Source), Ed Perry (Murphree Venture Partners), and Steve Sebastian (Nogales) was that capital is going to be harder to come by, you should be selling stuff off right now to increase liquidity, and lenders are going to expect stricter covenants going forward. "If you got a loan this spring," said Gordon, "good for you. You should keep it."

• Robert LaPenta, head of L-1, leads a charmed life. Not only did he start a $500 million company from scratch two years ago, but this year he bought a horse, War Pass, for $180,000 that proceeded to win a Breeder's Cup race, among others, and is now worth $20 million. "Now that's a good investment," he bellowed. I'd be shouting, too. You can find him in Kentucky this spring, I'm sure.

Securitas Systems buys PEI

In their first U.S. acquisition as an independent firm, Securitas Systems announced on Thursday the purchase of PEI Systems, an integrator serving New York and New Jersey. They're pretty vague with the numbers, saying they paid somewhere between six and nine times EBITDA, which who knows how much that is for a company with a little more than $11m in revenues. I'm guessing it works out to about one times revenues, maybe a little more to account for the 20 percent of revenues collected via service contracts.

I'll have a little more on the newswire Thursday, but no one is calling me back on this.

Zebra Technologies buys proveo, Navis is next

If you're like me, when you think Zebra, you think printers, but the company is rapidly becoming much more than that, turning itself into a major player in the RFID market. This week, Zebra announced an intent to buy Navis, a California-based manufacturer of RFID solutions directed at the maritime market, having been the first to provide automated container terminal operating systems in 1988, which improve velocity and visibility of cargo movement. Considering the SAFE Port Act and its mandates, this seems like a wise investment of $145 million (to be paid in cash).

Add this move to the 200 patents the company bought in the first part of this year, and a secondary announcement this week of the acquisition of proveo AG for $16.3 million, getting into the business of tracking ground service vehicles at airports, and Zebra is looking like a force in tracking important things in two rapidly growing large security verticals.

Clearly a company to pay attention to. Trackings things as a service could provide a tidy RMR. Oh, and Zebra expects $60 million a year in revenue from Navis going forward.

Honeywell to buy Hand Held Products

Honeywell International announced today a definitive agreement to purchase Hand Held Products, a privately held automatic identification and data collection (apparently, there's a need for an acronym to describe this, AIDC) based in Skaneateles Falls, N.Y. (Skaneateles? Isn't that the name of a Beatles tribute band that plays everything with horns on the upbeat?). The purchase price? $390 million, for a firm that did $285 million in 2006.

Hand Held's core products, according to a release, are bar code scanners and rugged (they have chest hair) mobile, wireless computers that are used for asset-tracking, logistics execution and supply chain management. The company will become part of Honeywell's Security Group within the Automation and Control Solutions business, assuming the deal passes regulatory review and closes as expected.

In the statement, Honeywell honcho Ben Cornett noted, "Hand Held has demonstrated leadership in image-based technology, which is replacing laser-based legacy produts." Interesting. I'll be curious as to how the security folks make best use of this.

Not sure what it means, but Honeywell's stock was is currently down about 70 cents on the news.

Linear-IEI deal goes final

I don't have a link to a release, as it was only emailed to me via Word file and I can't find anything official on the web, but Linear has now confirmed that the deal agreed to in May to acquire International Electronics, known as IEI, has been consummated. However, the release doesn't indicate whether the initial financial terms remained the same.

Anyhoo, here's the relevant piece of the release, if you're interested:

The Home Technology Group of Nortek, Inc., a group of home and commercial convenience and security electronics companies lead by Linear LLC, a wholly-owned subsidiary of Nortek, has made a move to significantly strengthen its presence in the access control industry with the purchase of International Electronics, Inc. IEI, headquartered in Canton (Boston area), MA. IEI has been in the security and controlled access systems business for over 30 years.

The two companies have very much in common with their line offerings but very little actual product overlap. The IEI line ranges from its Door-Gard stand-alone and entry-level access control products to its flagship product, eMerge, a browser managed integrated security management system. Linear has traditionally been in access control for perimeter security, including telephone and gate entry.

Linear Chairman Grant D. Rummell noted the opportunity for synergy arising from the complementary Linear and IEI product lines. “IEI is a market leader in access control stand alone keypads, locksets, and systems access control products and this will greatly broaden the over-all Linear offering,” he said. “At the same time,” Rummell pointed out, “IEI’s experience and innovation in the areas of access control software adds substantially to our systems depth.”
IEI President and CEO John Waldstein stated: “We look forward to the added market presence the association with Linear affords us and the opportunity for growth it provides. Being part of a strong access control and security industry leader allows us to continue to broaden our access control offerings as well as continuing to assure our commitment to excellence in service and support.” Plans call for IEI to continue at its Canton, MA, facility and to maintain and expand the IEI brands.

Don't they know that all we care about is what they paid for IEI?

Who's the mystery buyer?

Pure Technolgies, a publicly traded manufacturer based in Calgary, announced this week it intends to sell its video subsidiary, PureTech Systems, which landed a big contract with the Port of Halifax earlier this year. The buy, apparently is a U.S. company and the price tag is $3.25 million. Seems fairly cheap, really. But who's the buyer? Pure ain't saying:

Pure didn't name the purchaser, but said it was an advanced sensing technology firm whose principal market is Homeland Security.

That kind of sounds like iCx, I guess, but it could be anybody, really. What does "advanced sensing technology" mean, anyway? Analytics? Sweet motion detection? Chemical detection? Who knows?

Anyway, since the deal apparently closed Oct. 1, why doesn't the purchaser want to be named? What's the big secret?

Stanley Works to buy OSI Security Devices

In a deal that's been long rumored, Stanley Works announced it has entered into a definitive agreement to buy OSI Security Devices, make of Omnilock, for an unannounced sum. Things are very vague all around. According to a press release received at our offices, but posted nowhere else on the Web (otherwise I'd link to it), this was announced Sept. 25, and it was through one of Stanley's subsidiaries. Which one is unclear. Through Mullen PR, Stanley's agency, both parties have expressed zero desire to talk about the deal.

"The OSI Security Devices acquisition will enable Stanley to provide a complementary offering to customers and OEM partners," said Philip Bradney, VP of BD, in the release. "It will enable us to offer a full solution, from mechanical to online security."

Stanley Works couldn't do that before? Shows how much I know. I'm sure they'll both talk more after the deal goes final.

One thing I'll definitely be looking into: The press release quotes OSI CEO Dick Rasmussen, and the web site mentions a Rick Rasmussen, as VP of sales and marketing. Now, are they the same guy? Father/son? Or could they be brothers both named Richard, like in the Bob Newhart show, where Larry had a brother Darryl, and another brother Darryl?

Dedicated Micros buys Baxall

More news from the show floor: Dedicated Micros has announced the acquisition of camera-manufacturer Baxall (this is the only good link I can find for them). Though DM announced a line of cameras at ISC West, this remains a significant addition to a company that's pitching itself much more as a solutions vendor than a DVR maker.