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Better strategic alternatives for MMI hedgefunders?

Wednesday, January 25, 2012

Remember MMI Investments? I haven’t written about this NYC-based hedge fund in a while, but it appears that its principals have found some new, more attractive strategic alternatives to this NYC-based hedge fund.

Rueters reported this past weekend that MMI Investment principals Jerome Lande and Clay Lifflander were divesting stock and moving on.  I called Jerome Lande today to confirm and find out where he and Lifflander are headed and what they think about investing in the security industry--but he has not returned my call.

Lande and Lifflander, who had this profile written about them by Forbes a few years back, teamed up with Thomas “surrender the booty” Hudson of Pirate Capital to get Brink’s to split into two companies. (Well maybe it wasn’t an official team-up, but all of these hedgefunders were working for the same thing—“enhancing shareholder value” by getting Brink’s to separate the cash handling business from the home security business.)

In this case, Lande and Lifflander were successful. Both Pirate and MMI were Brink’s stockholders—and eventually board members who successfully agitated for the “review of strategic alternatives” back in 2008, which led, eventually to Brink’s splitting into the cash-handling business and Brink’s Home Security. The rest is history: BHS then renamed itself Broadview Security  and seven months later was purchased by ADT

Pirate’s ship sunk pretty quickly after the Brink’s deal, though there was word last year that Hudson may be getting back into the hedge fund business.

According to this report and others, MMI had some other investments in the security industry: notably Checkpoint Systems and Kratos Defense and Security.   Those investments didn’t work out so well.

From Rueters: “The activist fund had a mixed track record in its investments last year -- which typically involved taking a minority stake in companies and urging them to consider a sale.
Last summer, MMI amassed a near 10 percent stake in Kratos Defense & Security Solutions (KTOS.O), spurring a strategic review by the company that did not result in any deal.
MMI also failed to convince the board of Checkpoint Systems Inc (CKP.N) to explore strategic alternatives.”

I haven’t had a chance to scour SEC documents, but Bloomberg in August 2011 did report this about Kratos doing a casual exploration of a sale.

 “Kratos Defense & Security Solutions, Inc. is seeking potential buyers with the help of a boutique investment bank, two industry sources told deal Reporter. It is not clear whether Kratos has officially hired a financial advisor. Kratos Chief Executive Officer Eric DeMarco said: "Our policy is not to comment or discuss strategy or strategic alternatives." MMI Investments, L.P., holding 8.6% stake, said that Kratos' competitive advantages and growth prospects are greatly undervalued by its share price. "This undervaluation is unlikely to improve on a sustainable basis while [Kratos] remains an independent public company. Therefore, the reporting persons may engage in discussions with members of management and the board of directors of the issuer regarding strategic alternatives to maximize value," said MMI.”

And here’s part of an August 2011 Bloomberg report on MMI’s attempt to get Checkpoint to review its strategic alternatives.
“MMI Investments, L.P., a shareholders of Checkpoint Systems, Inc. (CKP) has asked the Board of Directors of CKP to conduct a comprehensive review and decide strategic alternatives to maximize value for all shareholders, including a sale of CKP as it is significantly undervalued given its strong products, technology, market positions and customer relationships. MMI Investments has also asked CKP to hire a banker for the purpose and explore strategic alternatives.”

Security cos. among fastest growing tech businesses

Avigilon ranks No. 4

YARMOUTH, Maine—Several companies who are active in the physical security space were listed on the “Deloitte 2011 Technology Fast 500,” released in October.

Security cos. make 'technology fast 500' list

Thursday, October 20, 2011

A quick glance at the “Deloitte 2011 Technology Fast 500” showed several technology companies listed who are active in the security space. Deloitte, is “a global professional services firm,” and has been compiling the list since 1995. Award winners were selected based on percentage of fiscal year revenue growth from 2006 to 2010. The actual revenue figures, alas, were not included.
Here they are:

  • Avigilon, a provider of cameras, video management systems and LPR software, ranked #4 with 38,796% revenue growth.
  • VidSys, a PSIM software provider, ranked #273 with a reported 320% revenue increase.
  • Aruba Networks, ranked #316 with 268 percent revenue increase.
  • Genetec, a provider of video management, access control and LPR software, ranked #374 with 212% revenue increase.
  • Kratos Defense and Security Solutions ranked 398 with 196 percent growth.
  • Identive Group, provider of products and services for the identity, security and RFID markets, ranked 468 with 152 percent growth.
  • Blackboard Inc., a provider of mass notification systems, ranked #482 with 144% revenue increase.
  • FLIR Systems, a provider of thermal imaging technology, ranked #487 with 141% revenue increase.

Specifiers, integrators say collaboration key to project success

Panel at TechSec says it’s essential the two talk and work together

DELRAY BEACH, Fla.—Communicate, communicate, communicate. That was the primary advice from two integrators and two specifiers who spoke on a panel Tuesday at TechSec Solutions here on the topic of how integrators and consultants can work most effectively together. Other advice included thorough vetting of integrators during the pre-specification phase to make sure they have the experience and expertise to successfully complete the project.