YARMOUTH, Maine—Industry consolidation will accelerate this year with two megamergers—the Tyco/JCI deal and the ADT/Protection 1 merger—expected to close by the end of 2016. Does this activity help or hurt the industry? Respondents to Security Systems News’ latest news poll who said massive consolidation is good just barely edged out those who said these megadeals hurt the industry. Meanwhile, another group of respondents said they have other things to worry about.
Several respondents said that smaller companies will have opportunities for growth while ADT and Protection 1 are focused on their merger. “For the short- to mid-term I think the mergers will help us because of the normal problems and disruptions that come with such mergers,” Tracy Hendrix, president and CEO of Femac Security Solutions, wrote.
Three-quarters of respondents identified themselves as an integrator or installer. Fifteen percent said they work in monitoring, and 11 percent said their company manufactures security equipment. (Percentages do not add up to 100 as a result of rounding.)
“In my experience, the consolidator has to put so much effort into the assimilation process and finding where and how to gain synergies, that their customer service suffers. Those unhappy customers will go somewhere and oftentimes, they go to a more traditional dealer specifically to get away from mega-alarm companies that have failed them from a customer service perspective,” another respondent wrote.
One manufacturer sees a benefit for his or her business, “As an OEM that owns a PSIM dashboard, … the turbulence created by M&A in the industry helps the more mature companies with sound partnerships and strategy; if Apollo doesn’t manage the ADT acquisition well, we all have a great chance of convincing the larger of the ADT end users to re-evaluate the security platform they use.”
Just over half of respondents said their business won’t see any change as a result of ADT’s latest deal, while 22 percent predicted that ADT will be…. Read Full Article