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A chat with SIAC’s Stan Martin

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Friday, September 6, 2013

This morning I had the opportunity to chat with Stan Martin, executive director of the Security Industry Alarm Coalition. He proved to be a valuable font of information about the current state of the alarm industry, in particular the three-pronged relationship involving alarm monitoring companies, law enforcement and municipal governments—all of which play huge collaborative roles in responding to legitimate alarms and mitigating false ones.

When I asked him what he considers an ideal alarm ordinance, it became abundantly clear just what kind of challenges an effective alarm ordinance has to address. A whole constellation of considerations go into curbing false alarms. 

“We’ve studied alarm management issues for twenty plus years, and we know what best practices will reduce these unnecessary dispatches,” Martin said. “We list them in our model ordinance.”

A model ordinance, Martin said, should require all alarm systems to be registered with local police. It should mandate the use of Enhanced Call Verification, or two-call verification, a protocol that requires alarm monitoring stations to attempt to confirm a signal is valid before requesting dispatch. It should require that panels feature the newest equipment standards, meaning they are compliant with the ANSI/SIA CP-01 Control Panel Standard – Features for false alarms—a standard that minimizes the single biggest cause of false alarms: human error.

Martin also emphasized the tremendous importance of strict enforcement of an alarm ordinance, but acknowledged that enforcement measures vary by municipality, and are often dictated by local politics—particularly with respect to the number of free responses permitted. The SIAC recommends no more than one or two free responses. It also recommends suspending response once a fixed number, generally between the range of six and 10, has been surpassed. 

Martin says this curtails chronic abuse and holds some of the larger commercial entities accountable. “You do need to stop responses,” he said. “Otherwise, the higher-end clients, commercial clients, banks in particular, will just write the check. They consider that easier. It’s the cost of doing business. But when police say they’re not going to come any longer, they have to take some kind of corrective action.”

Securadyne acquires Advanced Control Concepts

Deal brings platform for expansion in Southeast, fire capabilities, 30 employees
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09/04/2013

CARROLLTON, Texas—Securadyne, a startup independent integrator with national ambitions, today announced the acquisition of Advanced Control Concepts, an integration firm based in Pensacola, Fla.

Jason Hart named Identive CEO

Identive to focus product line on cloud and mobile, invests in sales and marketing for push into commercial market
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09/04/2013

SANTA ANA, Calif.—Jason Hart on Sept. 3 was named director and CEO of Identive Group, a provider of secure identification solutions for building, network and information access. Hart replaces Ayman Ashour, who resigned from his executive role but remains as chairman of the board.

Does RMR tell the whole story?

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Wednesday, September 4, 2013

Today, Ken Kirschenbaum, an industry attorney, broached the topic of valuation in the alarm industry in his email to subscribers. In the monitoring space, a company’s valuation is based “exclusively on a multiple of RMR,” Kirschenbaum explains. A reason for this is that, in a sale, an alarm company isn't selling its ongoing business so much as its subscriber accounts. 

While the RMR multiple can shed light on the value of a company on the verge of a sale, it doesn’t tell everything. In fact, as Kirschenbaum explains in the preface to an article by Dorsie Mosher of the Davis Group, RMR multiples can fall into a wide range based on several variables, such as contract stipulations, as well as financing and accounting decisions within the company. 

This is why investors and financial institutions tend to prefer EBITDA—earnings before interest, taxes, depreciation and amortization—to RMR. They regard the former as the more telling valuation metric, says Mosher, because, simply put, the figure is less prone to flux due to uncontrollable variables. Through EBITDA, investors can get a better idea of how much cash will be generated to pay debts and finance future growth. 

“A company can have $1 million in RMR and still be losing money, which is certainly not what the investor is looking for,” Mosher writes.

Kirschenbaum, for his part, believes EBITDA is not about to replace RMR multiples as the primary valuation metric in the alarm monitoring space. But when it comes to mergers, acquisitions and financing, it’s worth keeping in mind that RMR isn’t the only valuation category all parties are taking into account. 

How I Use My System: Talking panels and keypads with Phil Yereck of Future Security Controls

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09/04/2013

Phil Yereck, project coordinator and senior technician at Mississauga, Ontario-based Future Security Controls, entered the security industry after stints in the data and communications fields.

Security Partners acquires Response Center USA

The deal provides redundancy, and is expected to increase number of dealers taking advantage of managed services offerings
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08/21/2013

LANCASTER, Pa.—Security Partners, a wholesale monitoring company based here, has acquired San Antonio, Texas-based Response Center USA, a move that adds “better than 100 dealers” to its network, Mike Bodnar, president of Security Partners, told Security Systems News.

NICE Systems launches PSAP tool

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08/16/2013

RA’ANANA, Israel—NICE Systems recently announced the launch of NICE Inform Version 6, which enables Public Safety Answering Points (PSAPs) to evaluate the quality of service delivered across an entire emergency incident, according to a company statement.

Integrator enlists high school students in school security initiative

Integrator and school district partner to make security affordable and reliable
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08/14/2013

WALKERTON, Ind.—Vermillion Systems is working on an initiative to make security upgrades more affordable for school districts by involving students in the installation.

TriTek: Service, specialized jobs spur 10 years of growth

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08/14/2013

COLUMBIA, S.C.—Ten years ago, TriTek Fire, Security & Communications, based here, was “basically two men and a truck,” according to Eddie Stevens, one of its co-founders. Today, it has 50 employees, annual revenues in the multimillions and three offices—with plans for a fourth office by the end of this year.

Tsourides: Matrix to bring video to customers

New CEO expands direct channel in certain locations, integrator channel elsewhere
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08/14/2013

MIAMISBURG, Ohio—Ninety days into her tenure as CEO of access control provider Matrix, Holly Tsourides is working to expand the company’s video business and refine its go-to-market strategy.

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