Fired: All But One Exacq Rep Firm Now Out

This was what Exacq said at the time of the acquisition in 2013:

"They bought us for us, and did not have any built-in reductions in staff nor do they expect any consolidation of the sales channel."

Given they use the qualifying word 'expect' there, I am sure they could explain it that they did not 'expect' it, but things have changed over the last 18 months.

Either way, when companies get bought by conglomerates, we all know this is the textbook game plan.

I appreciate everyone's input on this and understand the emotions it has elicited. With the acquisition of Exacq, we ended up with two great rep firms in every territory. Along the way, we have looked for ways to increase sales of our full video portfolio, create efficiencies in our team and simplify our customer engagement. We tried this with two rep firms in each territory with limited success. Moving to a single rep firm in these territories creates efficiencies but, more importantly, it allows us a single sales force selling our entire portfolio and ultimately will make it a simpler process for our customers to do business with us. None of these were easy decisions to make; every rep firm for Exacq and AD were A-list firms.

As to what Tyco has said versus what we have done, it has been 21 months since this acquisition. Certainly, all of you have had to change your strategies in the past 21 months, to meet changing business environments. Virtually all of the other components of Excaq have been left intact; in fact, we have added to the regional sales and R&D teams. There has been far more Exacqtification of Tyco, versus the other way around. -John Becker, Tyco Security Products - Video Portfolio

The problem is that these Rep firms were essentially their sales team in those areas since the begining. Other Manufacturers turn over rep firms all the time, but not Exacq. REPMS has had Exacq since it became a Rep Firm, and has been a consistant top 3 revenue generator for them every year. Murphy & Cota has been the #1 or #2 Rep firm EVERY year until this last year. OCOM is another one that has been a solid firm.

This is a huge boon to the other VMS companies as Exacq just lost essentially what was the top 1/3rd of their sales team.

A, we are primarily covering this because it shows Tyco's changing strategy for making Exacq part of an end to end Tyco solution.

We wouldn't cover this if it was just one or two underperforming reps because, as you say, rep turnover happens regularly.

B, also has good color on the individual firms involved and their meaning / ties to Exacq.

To play devil's advocate, why didn't the Exacq reps drop Arecont?

Tyco seems clear that they want to sell an end to end Tyco solution. Arecont is not a part of Tyco and competes with Tyco Illustra.

I am not saying the Exacq reps were wrong to keep Arecont but if the Exacq reps really wanted to keep Exacq, there seems to have been a clear path.

SVC Marketing did get fired, which is suprising considering they were the reps for both Tyco lines of American Dynamics & Kantech as well as Exacq.

The amount of chaos in the industry has risen dramatically lately. You have companies being bought out, you have manufacturers firing reps and then hiring new ones, and then you have companies firing all their reps and going with different ones from the parent company.

I have seen that typically, the turnover of the low end reps is fairly frequent and common as they don't perform, and then get fired. But these reps that got fired from Exacq/Tyco are in the upper echelon. In fact, these reps typically brought in $1-3$ million a month in software and hardware sales. And on a good month, they can have a $6-$10 million month.

Thats why it is news, Exacq is going to have a sharp drop in representation and sales in the field as the older analog Tyco reps try to learn how to sell Exacq, and some manufacturer is going to pick up these guys and have a huge spike in sales.

Good question.

Yes, some rep changes always happen and IPVM certainly brings more publicity to it than any other media source would.

That said, the bigger issue is that there is no clear 'way of the future' right now. By that, I mean a big growth driver that lets everyone expand happily. In the past 15 years, DVRs, anti-terrorism and MP IP cameras all allowed the whole market to grow robustly. Now, we finally face a future where there is no big growth driver (analog HD is new and valuable to users but bad to most producers given the low, low prices and the rise of the Chinese manufacturers).

The pain, the cuts, the sell-offs of the last year or so are, unfortunately, likely to continue for some time.