Taking another step toward independence, ADT on April 10 announced the post-split management line-up, highlighting the appointment of Kathryn Mikells and laying out ADT North America’s financials, key performance metrics, strategic priorities and more in a Form 10 registration with the Securities and Exchange Commission.
The form says that Tyco, ADT’s parent company, “does not intend to comment publicly on ADT Form 10.” Tyco announced in September 2011 that it would split into three separate, publicly traded entities: Flow Control; the The ADT Corporation; and Tyco International (comprised of Tyco Integrated Security and Fire).
In addition to Mikells, the management team reporting to Naren Gursahaney—current president of Tyco’s ADT North American residential and small business security segment and future CEO of The ADT Corporation—will include David Bleisch, legal; Anita Graham, HR; Don Boerema, corporate development; Mark Edoff, Business Optimization; Steve Gribbon, sales; Shawn Lucht operations. The eighth member of the team, in charge of marketing will be announced in the future.
Not listed on the managemtnt roster is John Koch, current president of ADT, who plans to leave ADT, sources told Security Systems News.
According to the filing, ADT had 2011 operating income of $693 million and revenue of $3.1 billion, with 89 percent of that revenue being recurring. It has 6.4 million customers and estimates that it owns 25 percent of the $12.5 billion residential and small business security market in the U.S. and Canada. A chart says ADT and IMS Research estimate that Protection 1 has 4 percent of that market, Monitronics has 3 percent and Vivint has 2 percent. “Thousands of others” share the remaining 66 percent of the market.
Among ADT’s stated strategies is growing its small business segment. ADT said it will expand its “small business field sales force, which currently represents only about one-third of our overall direct sales force. We plan to provide strengthened small business marketing support to this enhanced sales force, including by building a larger, more robust partner network to improve our lead generation capabilities and by assisting in marketing additional value-added services, including ADT Pulse,” according to the Form 10 statement.
ADT intends to continue to “explore opportunities to provide ADT-branded solutions through additional channels, including telecommunications companies, broadband and cable companies, retailers and public and private utilities.”
“In addition, through our efficient operating model we believe we can significantly reduce the cost of basic security installation and services, opening up the potential for a much larger portion of households to purchase monitored security,” the form says.
Metrics noted on the filing include the following: The company’s attrition rate dropped from 14.3 percent in 2009 to 13.3 percent in 2010 to 13 percent in 2011, while ARPU (average revenue per user) went from $35.92 in 2009 to $36.10 in 2010 to $37.24 in 2011.
On the appointment of Mikells, Gursahaney said in a prepared statement: “Kathryn brings impressive financial leadership expertise and a proven track record of managing transformation while driving financial discipline,”
Mikells, joins ADT from Nalco, a water treatment and energy technology company, where she was CFO. Previously, she worked for 16 years for UAL Corporation, the parent company of United Airlines, where she was EVP and CFO.