UTC sells fire and security branches to Comvest Investment Partners

FARMINGTON, Conn.—Comvest Investment Partners on April 10 acquired the security and fire branch operations of UTC Climate, Controls & Security. Comvest has tapped two well-known industry veterans, Mike Snyder and Dean Seavers, to run the new business, which will be called Red Hawk Fire & Security U.S.

Snyder, former president of ADT, will serve as CEO and Seavers, former president of GE Security and SimplexGrinnell, will serve as president of the new business.

Terms of the deal were not disclosed. Snyder told Security Systems News that the business includes 50 branch offices and 1,350 employees. He said it does about $250 million in sales and installation revenue annually.

Snyder said Red Hawk is poised to compete with any national systems integrator. “When you really look at capabilities, we have all the parts that Tyco does: strong security [and fire] brand recognition and capability [as well as] monitoring, all integrated into a single business.”

The newly purchased business comprises “essentially all the service businesses—Detection Logic, Counterforce, Red Hawk and about nine other businesses that UTC acquired over a period of five years,” he said.

UTC bought Red Hawk Industries in September 2006 for north of $100 million. One year later, in September 2007, UTC consolidated its integration business under the Red Hawk brand.  In 2008, it bought Detection Logic, a major fire company.

Snyder said that he and Seavers will take a team approach to running the business.

Seavers “has great process management skills. He'll run the operation, run both sides of the business [fire and security] on a day-to-day basis ... I'll take care of the sales and marketing, the strategic stuff," he said. “And we'll meet somewhere in the middle, because there's obviously a lot of spillover [between those two roles.]”

“We love the platform,” Snyder said. “We do think there's room for new products, new technology, new distribution channels, and maybe at some point acquisitions.”

On April 11, Snyder said he and Seavers were going to concentrate in coming weeks on visiting branch offices, meeting employees and also meeting key customers.

That UTC sold the services business is not unexpected, said Imperial Capital's John Mack. UTC executives said they intended to divest $3 billion after the Goodrich deal was announced last fall, Mack said. Many people “suspected that the [security and fire] services business would be part of that divestiture,” he said.

Will UTC shed more of its fire and security products' businesses?

A statement from Geraud Darnis, president and CEO of UTC Climate, Controls & Security, seemed to indicate that the conglomerate is exploring that possibility. "UTC Climate, Controls & Security is strategically reviewing its fire and security portfolio to focus on businesses with industry leadership, large scale and higher returns,” Darnis said in a statement.  UTC did not respond by press time to inquiries seeking clarification on Darnis' statement.

The Comvest Group has invested more than $1.3 billion of capital. It does not appear to have other current investments in the physical security industry. However, before joining Comvest, managing director Roger Merrero worked on other major security deals with Monitronics and Protection 1.

UTC has had a presence in the security space for several years. In 2009, UTC acquired GE Security and closed that deal in 2010. That closing ushered in a series of reorganization announcements during the past two years.

Last summer, UTC Fire & Security aligned its U.S. fire and security services business under the Chubb brand. In September, UTC combined UTC Fire & Security and Carrier Corp. to form a new business called UTC Climate, Controls & Security. And in November, more reorganizing took place.