Subscribe to RSS - Imperial Capital

Imperial Capital

ADT to acquire Devcon Security for $148 million

ADT looking for more acquisitions

BOCA RATON, Fla.—The ADT Corp. announced this morning that it plans to acquire Devcon Security from Golden Gate Capital for $148.5 million. The deal—ADT’s first major acquisition since spinning off from Tyco International last fall—brings 117,000 accounts and $3.6 million of RMR. The transaction is expected to close in early August, Naren Gursahaney, ADT CEO, said during an investor call today.

Comcast and to acquire Icontrol to pay $140m for Connect and Piper businesses; Comcast to acquire Converge business for undisclosed price

TYSONS, Va. and PHILADELPHIA—Interactive services platform provider and cable giant Comcast today signed agreements to acquire different business units of platform provider Icontrol Networks, based in Redwood City, Calif.

Convergint acquires Total Recall

Dan Moceri: Convergint will expand smart city expertise

SCHAUMBURG, Ill.—One day after Convergint Technologies acquired New York-based systems integrator Total Recall, Total Recall president Jordan Heilweil was boarding a plane to meet a new customer in Savannah, Ga.

CCL to buy Checkpoint in $443m deal

Kessler: Combination will make Checkpoint ‘a better competitor to Tyco’

THOROFARE, N.J.—In a transaction valued at $443 million, Checkpoint Systems, a supplier of retail security and asset management solutions, today announced that it has agreed to be acquired by CCL Industries, a specialty packaging solutions company, for $10.15 per share in cash.

After ADT's news, Ascent stock rises

Wednesday, February 17, 2016

Ascent Capital Group’s stock price rose yesterday, on news of the ADT/Apollo deal.

I asked Imperial Capital’s Jeff Kessler about the stock’s jump and he characterized it as a “knee jerk reaction to the fact that the only other company in the United States that’s public, being traded, is being taken over.”

Yesterday (Feb. 16) Ascent’s stock price rose as high as 49 percent over its previous close of (Feb. 12) of $8.27 per share.  Yesterday’s high was $12.29. The stock closed at $11.00 and had been hovering around that price today.

Ascent’s stock price has been declining over the last 12 months. This time last year the stock price was $47.50.

Kessler pointed out that AlarmForce, another publicly traded alarm company, also saw a small increase after the news of ADT’s acquisition agreement. “If ADT is taken private [Alarm Force and Ascent] will be the only two publicly traded alarm companies,” he said.

Ascent Capital Group is a more well known peer to ADT, Kessler said, which is why Ascent’s price was affected more than that of AlarmForce.

“It will certainly have more people eyeing Ascent, to see whether or not there is some value in the Ascent monitoring capability for another buyer,” Kessler said. “Certainly I would think that private equity firms are looking at Ascent, because the stock has fallen down so far … but there’s no guarantees.” 

Axis’ Citilog purchase to bring more tools to customers

Kessler: Deal means easier access to intelligence and integration for higher end projects

STOCKHOLM—Network video provider Axis Communications on Feb. 1 announced the acquisition of Citilog, a provider of intelligent real-time video monitoring for traffic and transportation security and safety.

Cloud will enhance M&A activity

"New" security dealer will emerge, John Mack says

FOSTER CITY, Calif.—The cloud’s benefits to end users, dealers and integrators will lead to more funding for M&A, according to John Mack EVP, co-head of investment banking and head of mergers and acquisitions, Imperial Capital.

Securitas set to acquire Diebold division for $350m

Diebold to focus on self-service industry, it says

NORTH CANTON, Ohio—Securitas has agreed to buy Diebold’s North America-based electronic security division for $350 million. The divestiture by Diebold is aimed to better position it to pursue growth in the self-service industry, it said.

Johnson Controls to sell JCSS to Versar for $20m

McManus: JCSS will have a ‘better home’ at Versar

SPRINGFIELD, Va.—Johnson Controls (JCI), which has shed a number of businesses in recent months, on Sept. 4 signed an agreement to sell its specialized federal security integration business, called Johnson Controls Security Systems (JCSS), to Versar, a government-services business located here, for $20 million.

Drako-Brivo deal and ‘the new security dealer’

Wednesday, June 10, 2015

There’s been a lot of talk about cloud services and managed services proliferating in the security industry, but “to a large degree it has been a head fake,” according to John Mack, EVP and co-head of investment banking at Imperial Capital.

Many of the so-called cloud products are not true cloud-based systems, and managed services is in it infancy as well, Mack said.
He believes that the news that Dean Drako, owner of cloud-based VMS provider Eagle Eye and founder of Barracuda Networks, has purchased Brivo, the original cloud-based access control system, may help propel the emergence of a new kind of security dealer.

“These guys will be the leader,” he said.

“My guess is that we will see the evolution of a new class of dealer focused on the managed services and cloud-based model” who will do high volumes of business with small- and medium-sized businesses, Mack told me.

The combination of Brivo and Eagle Eye products (the companies will offer an integrated version of their products beginning in July) would provide a “complete solution” for dealers to sell as a managed services offering to the SMB market and multi-site location businesses, Mack said.

This new managed services security dealer would have to be more like an alarm dealer who focuses on RMR as opposed to an integrator who focuses on install revenue. They would also have to be “sales oriented guys not tech-oriented guys,” Mack said.

But, they’ll have to have the technical sophistication to deal with SMB owners, he said.

This model involves high-volume work, which requires capital to subsidize the installation, larger dealers would likely have to secure a lines of credit from banks.
But the RMR would be much higher than the alarm model. It could be as much as a couple hundred dollars versus $40 for an alarm monitoring contract, Mack said. Importantly, the attrition rate for Brivo customers “is meaningfully lower than the 12 percent you hear about [in the residential market],” Mack said.

“It will be a great business model that can create a ton of value for dealers,” Mack said. With a lot of managed services RMR, that dealer would be an attractive acquisition target for ADT, Stanley, Protection 1, and Diebold that want to increase their presence in the SMB and multi-location business market.

Who knows, Mack surmised, the future may find a Monitronics-type business that runs a dealer program and buy accounts from security dealers who sell Eagle-Eye/Brivo-type products. “That would take bank capital- raising out of the equation.”

“A lot of positive things for dealers could spin out of this business model,” Mack said.

Imperial Capital advised Brivo in the deal.