Security Systems News

JAN 2016

Security Systems News is a monthly business newspaper that reaches 25,100 security installers, product distributors, central stations, engineers & architects, and security consultants. Our editorial coverage focuses on breaking news in all major se

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Head briefs By Amy Canfeld LEXINGTON, Ky.—Full-ser- vice provider Bates Security, based here, is looking to organ- ic growth but moving outside of Kentucky also "is a natural option for us," com- pany GM Jeremy Bates told Security Systems News. Bates recently acquired more than 1,500 accounts from Kentucky Alarm Services, also based here, providing "a significant addition" to the company's RMR, he said. " We j u s t w e n t o v e r $400,000 last month organi- cally," he said. The Kentucky Alarm acquisition will add to that, he said, declining to pro- vide further details. ADT wins frst round over Monitronics dealer The deal was a good fit because both companies are family owned and in the same area, he said. Bates will now have 56 employees. Kentucky Alarm Services was owned by Ken and Sandy Duff. Bates is the state's largest family-owned and operated secu- rity company. It has made a number of acquisitions, but this one "is the first of our size," Bates said. "We're open to more," including outside of the state, he said. Kentucky borders seven states. Founded in 1984, Bates' customer base is 50-50 residential-commercial, with 70 percent of revenue coming from commercial. SSN By Amy Canfeld BOCA RATON, Fla.—A U.S. District Court granted ADT's request for a preliminary injunc- tion against Capital Connect, a Monitronics alarm dealer, bar- ring the company and its sales force from allegedly making false claims to ADT customers. The next step will be to take the case to trial, David Bleisch, ADT general counsel, told Security Systems News. ADT sued Capital Connect, claiming it told ADT custom- ers it was affliated with ADT or that their alarm systems needed to be upgraded. Capital Connect is headquar- tered in Tucson, Ariz., and oper- ates in Arizona, California, New Mexico, Texas, Colorado, Utah, Nevada and Idaho. It provides residential and commercial security and home automation. "Capital Connect does not condone or in any way encour- age any false or misleading practices by its sales representa- tives. As the court's preliminary ruling acknowledges, Capital Connect employs copious mea- sures—such as training mate- rials, sales ethics agreements and quality assurance calls—to ensure ethi- cal and truthful sales practices. The court's ruling is only prelimi- nary, and Capital Con- nect looks forward to the opportunity to defend its sales prac- tices at a full trial," Andres Correa, who represents Capital Connect in the lawsuit, told SSN in an emailed state- ment. He is with the law frm Lynn Tillotson Pinker & Cox, based in Dallas. ADT has also filed suit against four other Monitronics alarm dealers. ADT tracks a number of com- plaints and prioritizes them based on companies, Bleisch said. It filed the suit against Capital Connect in July. ADT says hundreds of its custom- ers have complained that other companies tried "to swindle" them into signing new contracts. "ADT is commit- ted to taking action to stop these shameful sales practices by bad actors in our indus- try," he said. "We will continue the battle against companies where decep- tive sales practices fourish to help protect consumers from falling prey to such swindlers." ADT gave a press conference on the topic of deceptive sales practices at this year's ESX. " O n e o f t h e t h i n g s doorknockers are doing today is lying to get a foot in the door. This [ruling] is recognition that that line to get your foot in the door is a deceptive action in and of itself, even if you attempt to clarify it later on," he said. Over the past three years, ADT has received nearly $6 million in settlements against companies that have made false or misleading statements while selling security services door- to-door. ADT also obtained court orders prohibiting the companies from using any fur- ther deceptive sales practices. The BBB reported that com- plaints about home security systems ranked 25 out of the 3,500 business categories it tracked in 2014, ADT said in its announcement about the preliminary injunction. ADT Corporation says it has nearly 7 million customers. SSN Bates Security considers crossing the border Dillard Alarm links growth to acquisition My Alarm Center gets $75 million increase to its credit facility NEWTON SQUARE, Pa.—My Alarm Center in November received a $50 million second lien term loan; Imperial Capital was the sole placement agent for the deal. The company also received a $25 million increase to its first lien term loan, making its total credit facility worth $305 million, according to an announcement from Imperial Capital. "Imperial Capital was an excep- tional partner to work with during our successful financing efforts," Amy Kothari, chief executive officer of My Alarm Center, said in a prepared statement. "We are extremely pleased with the outcome of the transaction, which will provide more than sufficient capital to meet our identified growth plan," Kothari said. "My Alarm Center is a long-term client relationship for Imperial Capital and we were thrilled to lead the exe- cution of a very well-received sec- ond lien term loan. … We look for- ward to continuing our support of the lompany as it grows," John E. Mack III, Imperial Capital EVP, said in the statement. Vivint: Pet owners' may fuel the smart home PROVO, Utah—Pet owners' passion "could be a significant entry point for many into the smart home … and is likely to be one of the strongest demand drivers" in coming years, according to Vivint. Sixty percent of Americans report- edly own pets, the company said in a prepared statement, and the "pas- sion they have for their pets … means a large market opportunity for those companies connecting pets and smart home technology." Smart home technology will allow owners to take better care of our pets' "safety, health and overall care" by, for example, monitoring their activity level and food intake. Broadband households plan for smart bulbs DALLAS—Thirty percent of U.S. broadband households intend to purchase a smart light bulb by end of 2015, according to research from Parks Associates. Some 17 percent intend to buy a smart kitchen appliance, and 14% plan to purchase a smart thermostat. The research firm will discuss strategies for utilities, service pro- viders and manufacturers to inte- grate these smart products into their home systems and services at the Smart Energy Summit: Engaging the Consumer, scheduled for Feb. 22-24 in Austin, Texas. By Spencer Ives FREDERICKSBURG, Va.—Dil- lard Alarm Company grew 33 percent in 2015, according to president and CEO Troy Dillard, who linked the growth to ser- vice and upgrades on accounts from an acquisition. The company's acquisition of Rappahannock Security Ser- vice's accounts "doubled our monitoring agreements over- night, for a small company that was a nice leap for us to grow," Dillard told Security Systems News. Dillard Alarm gained 700 accounts with the deal. The company now has 1,500 moni- tored accounts. Dillard said the company could acquire "at least every other year. So, I think our goal—since we didn't do one in 2015—would be to try to do another acquisition in 2016." In addition to repairs and upgrades—such as 2G radio conversions—on the newly acquired accounts, Dillard did more custom commercial work in 2015. Dillard Alarm continues to uses Blue Ridge Secu- rity to monitor the acquired accounts—the same central that was monitoring for Rappahan- nock. AlarmWatch monitors the rest of Dillard Alarm's accounts. Looking toward next year, Dillard said, "A huge part of our growth in 2016 will be reach- ing out to our existing custom- ers and seeing what we can do for them." Dillard Alarm, established in 1976, is a second-generation family-owned business. It has six employees. SSN By Amy Canfeld DALLAS—Smart home offerings have boosted residential security by more than 15 percent in the past two years, according to Parks Associates in its report, "The New Face of Home Secu- rity—2015 Edition." Smart home offerings also lower attrition rates, CEO Trisha Parks told Security Systems News. "Attrition is the enemy," she said. "The industry is facing its mon- sters." About 21 million U.S. homes have professionally monitored security and another 1.5 million have monitoring in a second home, Parks said. "Security was in a bind," she said, but smart home was the agent to move it forward. By the end of this year, nearly 6 million professionally moni- tored homes will have smart home control, the report said. That is due in part to big compa- nies such as Vivint, AT&T; and ADT aggressively marketing their smart home offerings with their systems. "Security households are 150 percent more likely than non- security households to state that they keep up with technologi- cal innovations and like to own the latest devices," Tom Kerber, Parks' director of research, home controls land energy, said in a pre- pared statement. Parks said the services will only get better and expand into new areas, such as connecting to sprinkler systems and the like, she said. Parks Associates will examine adoption of home security sys- tems and convergence with the smart home at the tenth annual CONNECTIONS Summit: IoT, Entertainment, and the Con- nected Consumer at CES 2016, Jan. 6-7, in Las Vegas. SSN Rise of the smart business David Bleisch Jeremy Bates www.securitysystemsnews.com January 2016 SECurITy SySTEMS nEWS Residential systems 24 residential systems

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