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Commercial Fire & Security

Battered but unbowed

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Tuesday, August 7, 2012

Wayne Wahrsager’s New York Merchants Protective Co. Inc.—an alarm company in existence for more than 100 years—is no more as the result of a $20 million breach-of contract lawsuit filed against the company and Wahrsager last year by Bank of America.

But Wahrsager tells me he is still very much a player in the security industry—and planning to launch a new alarm company in October with $50 million in funding behind it.

“You just brush yourself off and start all over,” he told me this week.

It seems that what Wahrsager experienced over the past year and half would have had most people down for the count.

First, in January 2011, came the Bank of America lawsuit contending it was owed more than $19.2 million for the default of a loan.

Then, four months later, Wahrsager got fired from his job as president of NYMP and pretty much literally got thrown out of the company’s Freeport, N.Y.-based office by the receiver a judge appointed to run the company. The receiver changed the locks at the office to keep Wahrsager out but he just took his office door off its hinges and continued coming to work until a judge ordered him gone that May.

Then, last October, the judge approved the sale of NYMP’s assets to pay off creditors. The sale to Professional Security Technologies of New Jersey was completed earlier this year, Wahrsager told me.

He’d been involved NYMP since 1988, but the previous owners were cousins so it was a family business that turned 100 years old in 2010, he said.

Wahrsager contends that the company went for far less than it was worth, and that if Bank of America had been willing to work with him, he would have repaid the loan “100 cents on the dollar.” He said he’s still a named defendant in the lawsuit, which is still pending.

But Wahrsager said he’s working as a consultant for Bellmore, N.Y.-based Commercial Fire & Security, which he said was formed about a year ago.

And he’s involved in the start up of a new company that he said has a group of investors behind it and is expected to launch by the end of October if all goes as planned. The company may be called Commercial Fire & Security—the new company may acquire the existing one—or take on a new name, he said. It will be based somewhere on Long Island, Wahrsager said.

Stay tuned—it looks like another round for Wayne Wahrsager.

Tyco post-split talk Part II: Are acquisitions in the air?

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Thursday, November 3, 2011

Here’s Part II (I posted Part I yesterday) of a blog with some Tyco post-split details, which I found in the process of reviewing the Tyco International Conference Call. The call took place on the day that Tyco announced its plan to split into three publicly traded companies.

On that day, most of the industry, including yours truly, was running around the ASIS show floor. The quotes below are courtesy of Seeking Alpha.

Was the split construed to ready Fire & Security or ADT for acquisition? And, is there any government regulation that would preclude the acquisition of ADT or Commercial Fire and Security from taking place in the next 18 months?

Asked if Tyco had “not had substantive conversations with any outside parties about the sale of any of these businesses?” Tyco CEO Ed Breen said: “We are well aware of the laws and regulations out there and … we are very careful about what we do. So I will leave it at that.”
 
OK, well is there anything to preclude one of the entities from being acquired in the next 18 months?
“If anyone approaches us about a piece of the … our Board would have to take that under advisement. It is our fiduciary responsibility, but it is not our plan. Our plan is to get these out there on their own and let them play in the their industry,” Breen said.

Answering a question on a different topic, Breen said: “I’m a big believer that there going to be consolidation in these industries. I think you’ve already been watching some of that occur and we want our businesses to be able to play in that environment in their respective industries.”

Asked about the split between resi and commercial security, Breen said much of the separation has occurred already, when ADT split into residential and commercial divisions.

And, in terms of the monitoring operation, Breen said they have a plan about how to separate the two and “it’s easier than it sounds.”

Whey didn’t they bifurcate the two businesses back in 2006? The companies were too fragmented at that time, Breen said. “The management teams were more fragmented and there wasn’t consistent performance.”
 

Tyco post-split Part I: Dealer news; New Fire & Security group to save $

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Wednesday, November 2, 2011

Will ADT grow its dealer or internal sales groups post split? How will Tyco save $400 million to $500 million mostly from the new Commercial Fire and Security division?

I found some interesting details on those questions when I finally had a chance—on a recent long plane ride—to review the Tyco International Conference Call. The call took place on the day that Tyco announced its plan to split into three publicly traded companies.

On that day, most of the industry, including yours truly, were running around the ASIS show floor. The quotes below are courtesy of Seeking Alpha.

ADT to grow internal sales force

ADT residential currently derives about half of its business from its dealers and half from its internal sales force, but the goal is “to get more internal sales people, [and] keep the dealer channel where it’s at,” said Tyco CEO Ed Breen during a recent Tyco earnings call.

“We have a good business there, but [we will] continue to increase on the direct side of the house,” he added. ADT serves more than 6 million homes and small businesses, has more than $3b in annualized revenue (90 percent of that from RMR.) Its average creation cost for accounts is $1,000, according to the call.

Naren Gursahaney, who is now president of Security Solutions and who joined Tyco in 2003, will become CEO of ADT. And, ADT will no longer be officially headquartered in Switzerland with the rest of Tyco. Presumably it will be in Boca Raton, its U.S. headquarters. Asked about ADT’s resi business abroad, Breen said that most of its business outside of the U.S. is commercial, and regardless, ADT overseas business has always been managed by commercial…so there’s not a change there. Of the estimated $10 billion in revenue Commercial Fire and Security, about $1 billion is RMR from fire and security and most of the security business is commercial, with a little residential, he said.

Commercial Fire and Security business key to to $400m - $500m savings

When the fire and commercial security business are combined, the new approximately $10 billion entity will be the “largest global provider of fire and security products and service.” This entity will continue to list Schaffhausen Switzerland as its headquarters. Its CEO will be George Oliver.   

Breen said Tyco as a whole will save $400 to $500 million over “multiple years” as a result of the split. The bulk of that savings will come from Commercial Fire and Security and the Flow Control business, he said.

At Commercial Fire & Security “we’re bringing together a security commercial company and a fire commercial company, all extremely global with all the back offices. So you can imagine not only do we get those synergies htat we talked about but when we bring those two businesses together, which have been managed separately, that helps us a little more create that synergy.”

He said the combined businesses will make a “big push” to go after enterprise business and said that “we’ve created key verticals, on one of our key verticals, for instance in Security and Fire is oil and gas … we’re not going to miss the opportunity to really go dive deep on those…”

Look for more on Tyco post-split tomorrow in this space.