Security Systems News

JUL 2017

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Head briefs Battle for smart home By Spencer Ives ARLINGTON, Mass.—American Alarm and Communications, a full-service security company based here, this week announced the acquisition of Security Design Consultants, based in Westwood, Mass. The transaction was finalized on April 28. SDC's account base is about 80 percent residential and 20 percent commercial; American Alarm's base is about 50-50, according to Louis Samp- son, American Alarm's COO and co-owner. "SDC operated for more than 40 years, primarily in Boston and the western suburbs of the city. Their main focus was residential systems, installation and service. They used a third-party monitor- ing partner, but over the next few weeks we will transition all cus- tomer monitoring to the Ameri- can Alarm central station," Samp- son told Security Systems News in an email interview. Brad Smith, former president of SDC, will be focusing on SDC's affiliated com- pany, Audio Video Design, which was not included in the sale to American Alarm. Smith is the owner and presi- dent of Audio Visual Design, which provides integrated entertain- ment and automation systems. "We have known Brad (and his late father) for many years and were friendly competitors in many of the same communi- ties, with a mutual respect for each other's work," Sampson said. "Over the past few years, we'd have discussions about this potential deal, because Brad's other business was also very successful and he was more inter- ested in focusing on that going forward." Following the deal, American Alarm and Audio Visual Design are now in a referral partnership. "They will refer security work to us, and we will refer home entertainment and digital technology integration to them," Sampson said. SDC's Smith, in a prepared statement, said, "Looking to the future, I decided that my security customers needed the services of a company with more resources, one that can provide the very best service at a competitive price." He continued, "American Alarm is the hands-down lead- ing regional security company in New England. It is the model of the phrase 'Big enough to serve you, but small enough to know you.'" This is the company's third acquisition within 12 months, following its purchase of Atlas Alarm Corp. in January and Elec- tralarm in September 2016. "Our main focus now is on effective integration of these acquisitions to make sure we are serving our customers well. Of course, we are always keeping an eye out for opportunities and working on acquisitions in the pipeline," Sampson said. Barry Epstein, president of Vertex Capital, advised Secu- rity Design Consultants on the deal. SSN American Alarm purchases SDC in Mass. Vivint Smart Home opens new campus at Utah State University PROVO, Utah—Vivint Smart Home announced the opening of a new cam- pus in Logan, Utah. Located on the Utah State University Innovation Campus, the new facility is part of a strategic effort to expand the company's talent base in Utah. "As the leading smart home services provider, we are constantly pursuing opportunities for growth and innova- tion," Alex Dunn, president at Vivint Smart Home, said in the announcement. "We look forward to tapping into the strong business and engineering talent of the Utah State University community and contributing to Utah's growth as a tech hub." The 43,000-square-foot building will house up to 400 employees and includes a demo home equipped with a Vivint smart home system, a full-size basketball court, fitness center and six training rooms, including a technical training room and a hands-on product training room. "We are very pleased to provide space for Vivint Smart Home on the USU Innovation Campus," Noelle Cockett, Utah State University presi- dent, said in a prepared statement. "The center will afford employment opportu- nities for people in Cache Valley, includ- ing USU students. Also, we anticipate USU research and outreach faculty engaging with Vivint R&D personnel in areas of common interest." Home automation to add $1.8b in sales by 2019 PORT WASHINGTON, N.Y.—According to The Future of Tech report from global information company, The NPD Group, based here, home automation prod- ucts will add $1.8 billion of new con- sumer electronics sales through 2018. The Future of Tech report forecasts 74 percent growth in the home automation category from 2016 to 2018, driven by sales of security and monitoring prod- ucts, as well as growth in power and sensors. "Awareness and interest are starting to build significantly for smart home products, with Alexa and Google Home catalyzing growth," Stephen Baker, vice president, industry analyst for The NPD Group said in the announcement. "Digital assistants will claim a major piece of the consumer market in 2018, and in doing so will drive adoption of compatible devices and solutions." According to the report, emerging categories, such as virtual & augmented reality (VR/AR) and drones, will also be key contributors to new consumer elec- tronics sales. NPD expects VR/AR sales in 2018 to be nearly four times higher than 2016 sales, while drone sales will double over the same time frame. By SSN Staff DALLAS—With the inva- sion of the telecom, cable and tech companies into the smart home space, security deal- ers have been faced with new challenges and battles as they try to compete for new busi- ness created by this new era of smart home connectivity and automation. Whereas in the past when customers would turn to their security provider first to ask about smart home products, a new report from research firm Parks Associates shows that there has been a shift in homeowners' purchase behav- iors. Among current smart homeowners, 26 percent pur- chased their device from a retailer such as Home Depot, Walmart or Sears, followed closely in second by security dealers, with approximately 20 percent purchasing these prod- ucts through them. H o m e o w n e r s n o w h a v e "more options, increased per- sonalization, and enhanced value across the full spectrum of IoT experiences," Dina Abdelrazik, research ana- lyst, Parks Associates, said in the announcement of Parks' annual report, Global Con- nected Living Outlook 2017: Building on the IoT. "Follow- ing early disruptions, many players are now rising to the challenge to create competitive solutions that better accommo- date the needs of the connected consumer." Although the big retailers are getting a bigger portion of the pie, they are also raising awareness and educating the public, which is creating addi- tional opportunities for deal- ers to be the channel through which smart home owners purchase all of these intercon- nected devices, many of which work in tandem with security systems and services. For example, additional Parks' research, which was unveiled at the firm's 21st- annual CONNECTIONS Con- ference in May, shows that two- thirds of smart homeowners and shoppers want crossover applications that integrate with their home entertainment devices. "Key crossover use cases include safety and security alerts popping up on a smart TV and video from networked cameras shared across the con- nected screens in the home," Elizabeth Parks, senior vice president, Parks Associates, said in the press release. "In both cases, two-thirds of smart home owners and shoppers find these features appealing." Select Security will gain about 28,000 accounts, bringing the company's total to nearly 60,000. The deal was expected to close on or around June 23. AlarmForce announced that the total con- sideration was $11.6 million. "It's the largest acquisition that Select has done in our 13 year history," Steve Firestone, Select's president, told Security Sys- tems News. The company's RMR will rise from about $1.2 mil- lion to nearly $2 million, he added. The company plans to add on 40 new employees fol- lowing the deal, according to Firestone, 20 of which are field operations employees joining from AlarmForce. "We were presented with the opportunity about 60 days ago and we looked at it and came to the conclusion that it was something that we wanted to pursue," Firestone said. The company's over- all growth strategy is to enter new markets through strategic acquisitions, accord- ing to Firestone. "This one does just that," he said. Firestone said that the company both increases its presence in current mar- kets—Ohio, North Carolina and Kentucky, among oth- ers—but also extends the company's footprint into two new geographies: Florida and Georgia. "Both of those markets are attractive to us," Firestone said. Firestone noted that by focusing on "automation sys- t e m s , c o n s i s t e n t processes and pro- cedures across our entire branch network, the right talent in our organiza- tion … the infrastructure of our business has been built to support an organization three times to four times our size." Building this infrastructure has been an initiative over the past four to five years, he said. Another benefit that comes from the acquisition is "accel- erated career opportunities for the people that have been working very hard for us over the years," he said. SSN Select Security nearly doubles after latest buy Security Design Consultants' employees join American Alarm in deal Lou Sampson Steve Firestone Continued from page 1 battle see page 21 july 2017 SEC u RIT y S y STEMS NEWS Residential s ystems 20 residential s ystems

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