Tyco Acquires Exacq

This is great for us that compete against Tyco. Excaq is a well known product, and many know its weaknesses. I was aware Tyco was dealing with Avigilon to some degree but them buying Exacq is a great news to us. It is a huge blow to all those exacq fans out there. I agree that Tyco will ruin Excaq. I think it is starting to show how desperate Tyco is to get into the IP industry. Their reputation from ADT has been hard to overcome.

Damn. Just when I was starting to like Exacq.

When I worked for them years ago, the joke was TYCO stood for "Take Your Company Over".

Via Twitter, "Good way to ruin a great security products company - have it acquired by a large publicly-traded conglomerate."

This does not serve as a surprise to me at all. I just hope that ExacQ product development remains the way it has been. 6 sigma certification is probably what they will push for with the product which always slows down the development.

Well that was unexpected.

Nooooooooooooo!

Well, it's a sweet spot every entrepreneur hopes to hit one day! Well done Exacq team.

I only would like to comment to anti Tyco community that why don't you buy such good companies before Tyco does, so you don't have to end up being jealous and getting out of competition.

Its a business deal between Tyco & Exacq. Stay out of wasting time on your useless comments, which is not going to reverse the deal.

I knew there was a reason we didn't take on Exacq as a partner.... This is quite fitting. I'm sure Commerce Casino is pretty pissed that they dumped hundreds of thousands of dollars into American Dynamics last year, only to find their products are garbage. If only they had waited a year they could have had slightly better garbage...

Undisclosed, I'm sure it's a great idea to buy good companies like Milestone, Genetec, and OnSSI. But considering Tyco ended up with Exacq it sounds like they aren't for sale... There's a reason. Their owners and shareholders don't wish to flush their companies down the drain for a quick buck.

No way any shareholder from Milestone, Genetec, OnSSI would pass up an offer for 3x revenue. No way.

This was not unexpected, I've been expecting this for the past couple of years. The owners have made a living off of selling their companies for decades. I believe this is the fourth company they have sold off. They know how to start a company and make it successful and when to sell it to get the most out of it. In five years, they'll probably start another one and do it all over again. True Vision (sp), Integral, and now Exacq to name the last three.

Time will tell if Tyco runs it into the ground. That is what happened to Integral. The only thing left from that company is a DVR line for Pelco. A good portion of the employees worked for Integral so they should have expected the sale once they became successful. Integral was actually purchased a few times before it was run into the ground, so you never know. I expect that they will at least keep going for a few more years in a positive direction. If the employees start bailing like rats from a ship, then that is a sure sign things are bad.

Well I can't speak directly for any of these companies, I will say that an executive that takes pride in what they do and what they build doesn't sell out to a company like Tyco. They surely know the product will not fare as well as it has.

Do we have any idea how independent Exacq will remain under the Tyco name? How much control do other business units (like Software House, Kantech, DSC, or AD) have?

This was expected. Rumors about a Tyco acquisition have persisted for the last few years, since AD starting OEMing Exacq.

That said, I am not sure what options Exacq had here. At some point a company needs to exit, either through acquisition or IPO. Unfortunately, the US IPO market, because of Sarbanes Oxley, etc. makes it very hard to IPO unless a company is fairly huge ($100+ million revenue), which is had for surveillance companies because of the limited overall market size. Ironically, it's easier for surveillance companies of similar size in other countries to go public (e.g., Avigilon, Mobotix, IndigoVision, ACTi, etc.).

"I will say that an executive that takes pride in what they do and what they build doesn't sell out to a company like Tyco."

Tell that to David McDonald (Pelco -> Schneider), Pete Jankowski (Loronix -> Verint, Sypix -> Cisco, Next Level - ???) and numerous others...

The $150 Million sale price just seems really high to me. To me, that is the most surprising part.

Maybe the Integral/Exacq guys can take this big wad of cash and go 3 for 3?

Will this trigger a round of buying wars between the congolmorates? They always seem to have to one-up each other. If so, who are the likely candidates?

That sucks! TYCO sucks and is going to completely jack it up on a bunch of fronts!

I don't use their hardware because I can design and build my own servers for less with more power, but I like the software. Sure it's lacking some features, but not when you compare costs, ease of use, integration with Windows, Mac, and Linux.

Well, I wouldn't vouch for Schneider Electric either, especially considering how they've run Pelco into the ground. Then you have Honeywell, who screws up just about everything they touch in Video Surveillance. Also, I forgot to include Beat Meier et al, who sold Fast Video Security to NICE, who proceeded to strip the product of everything useful and abandon it.

I cant wait until we get big enough to sell to Tyco!!

Whats about all the hate for Tyco, is it just because they are big or are their products really overprices and bad quality? In what ways have they run products and companies to the ground earlier?

Good question, why the hate for Tyco?

I am not sure 'hate' is the right word, though some may 'hate' them, mostly it's about a lack of respect (for the organization, not the people).

Yes, they are really big and the products tend to be mediocre. As for Tyco as integrator (i.e., the old ADT Business), they have a terrible reputation among end users for screw-ups, indifference, etc.

They might just strip the company down for the technology and leave it as an empty husk... as sad as that might seem, it does happen.

What about me as an integrator, I have just started looking at CEM access control solutions, and if they not get the AC2000 Lite version integrated with Exacq it looks like a sweet combo to me. DCS intruder products also seems nice.

Is the reputation of the companies inside the Tyco security group just as bad?

Typically when any large conglomerate takes over another successful company, their huge corporate heavy policies and old outdated ideas start taking over. That's when the talent and creative driving forces either leave or are run out from the company.

There are many examples across all kinds of tech industries that demonstrates it. I just hope the Exacq developers as well as the creative forces behind the software are at least somewhat left alone and intact.

Fredrik, the reputation varies, though on the video side, they are not much known for innovation. They tend to be slow in new releases and behind the cutting edge.

That said, VMS server software is reaching the stage now where it's more about maintenance and incremental advances than sweeping changes. The innovation in VMS is now more on the edge and in the cloud.

The phones of the code developers have to be ringing off the hook with calls from Avigilon/OnSSI/Genetec etc...

I suspect Tyco is taking actions (either carrot or stick) to make such moves more difficult. That said, I agree that, when acquisitions occur, it provide an opening for rivals to pouch.

With 45K out in Exacq quotes, i'm comfortable with the quotes since those system will remain static during their lifespans. Next year at this time, I'm not sure how i'll feel about Exacq. So I may or maynot be quoting them. I just have to let this run its course :(

What does Honeywell do to respond to Tyco so they can mess up another company in the security industry as well?

"What does Honeywell do to respond to Tyco so they can mess up another company in the security industry as well?'

Oh boy! :)

Honeywell could really benefit from buying a video company. And, hey, maybe this deal increases the priority for a video acquisition for them?

John - What video company(ies) do you think are available for Honeywell to purchase?

Didn't they buy MaxPro VMS from an Australian company? It seems they already gave this a shot a failed.

So we know this means a bigger role for the AD AH-DVR but what about other Exacq OEM's, isnt the S2 NetVR based on a Exacq engine, does Tyco keep OEM agreements with S2?

$150 million sounds like a huge amount of dough, but it's walking around money for Honeywell or any of the big conglomorates.

Years ago when I was still doing fire systems, Honeywell ended up buying most of the major players in that market: Silent Knight, Fire-Lite, Notifier, FCI, and Gamewell. Tyco bought up ADT and Simplex (as well as non-alarm fire companies like Grinnell and Ansul). GE bought FAST & Edwards (then sold them to UTC along with all of their security lines). Aside from a few smaller players, you can't buy a fire alarm system that isn't owned by one of those congolmorates.

What I think is going to be the tricky part for the Exacq/Tyco deal is that Exacq pretty much supports all of the major camera brands. The Tycos and Honeywells ususally prefer to sell their proprietary lines of cameras. I wonder how that will work out. Time will tell...

I must side with John H. on this transaction. All emotions and past history aside if Tyco allows the entreprenuerial side of Exacq team to grow their offerings with additional development, marketing and brand support the price Tyco paid will be a non issue. Gaining new sales channels while supporting existing channels will provide the growth potential to enable their technology development and market share. Time will tell but I would lean towards a smart move by Tyco that makes a strong statement towards their commitment to growth in the IP video market space.

As an integrator who have been 100% behind Exacq for the past 3 years, we're more than a little concerned.

Tyco have done to surveillance technology what Burger King did to filet mignon.....

This is a hige disappointment, I have been a fan of exacq for years and we sell a ton of it. The first thought that came to my mind was the end of Spaceballs the movie. Not sure what we're going to do now.

I'm glad I'm not the only one that agrees Tyco is going to likely do more harm than good. It's hard to know where other integrators stand on a company such as theirs. I began to dislike them when American Dynamics was charging 3-4x more than any other manufacturer, and offering less than half of the features. I remember seeing $4500 dvrs that were 15 fps!

I am no fan of Tyco, but I think this discussion has now gone overboard on beating them up. In particular, the Kozlowski debacle really doesn't relate to anything that Tyco security does today. These guys are more hugely mediocre than evil.

That said, I am amazed at how openly negative people are towards Tyco. I thought industry people were scared of Tyco, I guess that's not so much the case today.

Btw, this morning, American Dynamics just sent an eblast via SSI promoting AD's VideoEdge Hybrid, which completely overlaps Exacq's products.

I certainly don't fault AD for the eblast as I am sure this was scheduled weeks in advance. However, it's an excellent, and ironic, example of the redundancy / duplication this acquisition brings.

John, I was simplying comparing the previous upper management with how the company runs as a whole. Apple doesn't fall far. I'll submit.

You're implying that the current company is similar to Kozlowski, who was convicted on "criminal counts of grand larceny, conspiracy, securities fraud, and eight of nine counts of falsifying business records."

Whatever you dislike about the current Tyco Security Products, do you have any evidence whatsoever that they are engaged in any criminal activities like the 'previous upper management'? I see none.

I really think you should stop making such comments / implications.

I guess when I think of Tyco, I really don't even think surveillance. I think DSC, Kantech, Software House, and ADT.

Granted I really only have experience with DSC and a little Kantech, compared to whom I deal with most often (Honeywell) Tyco looks like an amazing company.

At least from my point of view Tyco doesn't market their video as the best on the market, like the Honeywell reps are continually trying to do. Seems like they admit they have shit, and tried to pick up something better.

Exacq had been our favorite all-around VMS package for some time, until the recent Milestone upgrades; now Milestone has kinda taken first place here. But we continue to sell lots of Exacq. I have to say, tho, that the thought of buying anything from Tyco gives me chills. The few times we've had to work with legacy Intelex systems have been unbelievably frustrating - esp. after hearing that Tyco essentially dumped the entire Intellex development team years ago and so could not do anything to improve that system's utter lack of compatability with wireless and modern camera systems.

We've also have had some pretty bad experiences selling to Tyco / ADT. In fact we have a rule (a) never ship them anything without a complete written and co-signed PO with no wiggle room in the wording and (b) charge a Tyco / ADT surcharge to compensate us for the headaches involved in actually getting paid (within 90 days and half a dozen emails, faxes and phone calls if you're lucky). And have you ever seen the vendor forms they try to get you to sign (we refused btw)? All sorts of comletely unrealistic and overly punitive provisions such as you have to provide a brand-new unit if something goes wrong with the old one up to 5 years after installation and pay for their labor, no matter how lousy their original installation job was. Never sign one of these if you value your sanity and your profitability!

I just hope that Tyco really does leave them alone. Past history leads me to doubt that outcome tho.

What is Tyco's history of selling direct to the end users? Is there a risk now that when an integrator goes to bid or sell a job, he/she is going to have to comepete directly against Tyco?

This was a strategic purchase by Tyco/AD because their lower H-DVR models were built using the Exacq software, customized of course for AD. Once folks realized it was the Exacq software, many decided to just buy from Exacq instead. I have no doubt that AD will continue to use the Exacq product line, but it will remain in the lower levels for H-DVR sales, and provide better economics for AD in the end.

This was not a play by Tyco to add a secondary product line or cannibalize the competition, but rather to make the HDVR line more profitable for an already existing platform. (Clearly, eliminating some of the competition has always been a strong motivation for Tyco too.)

The VideoEdge servers (and newly updated Victor Client software) will always remain a more advanced solution than the rudimentary Exacq software that was supplied on the HDVRs.

So Tyco paid $150 million cash for an HDVR line that has rudimentary software???

Sure, rudimenatary compared to recent releases of the VE Victor Client. Not sure on the details, but the introduction of the Exacq software occured several years ago onto their HDVR platform. My understanding is that AD was spending a hefty amount of money already for the software. The sales of that product line went through the roof for AD so it must have made sense for them in what they project sales will continue to be for their HDVRs. I don't have any details past that.

The Victor client is more like a mini-PSIM providing integration / unified viewing of different Tyco products. I don't think that's a fair comparison to a full VMS like Exacq (which has a broad array of advanced server side functionalities).

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