Subscriber Discussion

UTC Considering Selling Chubb, Would Convergint Purchase Them?

UI
Undisclosed Integrator #1
Nov 04, 2018

With UTC announcing they are exploring the sale of Chubb, I heard a rumour Convergint is in the running to purchase them?

Anyone else heard this rumour? Seems a little odd, given UTC supposedly wants about $3 Billion, and Convergint is like a third that size.

I'm sure it's just rumours and means nothing, but thought it was worth asking around here.

NOTICE: This comment was moved from an existing discussion: Convergint Acquisitions Reshaping Integrator Market

(1)
JH
John Honovich
Nov 04, 2018
IPVM

This could happen if Convergint's parent Ares Management funded / brokered the deal.

Ares has $100+ billion under management, so $3 billion would not be out of the question for them. The comparable would be what Apollo did with Protection1 and ADT (i.e., Ares would be Apollo, Convergint would be Protection1 and Chubb would be ADT in this hypothetical).

If Ares felt that Chubb was undervalued and the Convergint leadership / management / 'gopher fun' culture could increase Chubb's value, it could happen.

Clearly, Convergint and Ares are looking for big growth and acquisitions. That said, I don't know enough about Chubb to opine on them.

(2)
UI
Undisclosed Integrator #1
Nov 05, 2018

Ah yes, I forgot Convergint's parent company/owners/what ever. That's a good point.

LJ
Lee Jones
Nov 05, 2018
Support Services Group

UTC has done their market research, like Apollo/ADT .… time to exit.   Ares/Convergint might have an alternate strategy… to be positioned to pick up the pieces.

(1)
U
Undisclosed #2
Nov 05, 2018

Most of Convergint's acquisitions have been of successful or well-regarded integrators. Their claims have been that these acquisitions represent areas for strategic growth, not just buying a business to add it to the portfolio in general. Convergint also brings some back-end operations that help(ed) these acquisitions scale.

Chubb has never been viewed as the kind of company that Convergint would want to buy, at least in my opinion. They would also come with a lot of the back-end overhead that Convergint already has, creating operational deficiencies in that regard.

Convergint also likes to talk about how they keep the management teams and staff in place, and tend to grow the number of employees at a location they acquire. That would seem less likely with a Chubb acquisition, at least for the back end employees.

Maybe if Chubb was willing to sell off specific locations they might have a buyer in Convergint, but I don't see Convergint having much interest in buying Chubb as a whole.

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(2)
JH
John Honovich
Nov 05, 2018
IPVM

#2, good points. I agree it does not fit Convergint's profile.

If there is a 'rumor' out there, it could be simply that at Convergint / Ares size, any time a security integrator becomes available, they will do due diligence. At the very least, it is good competitive intel and if they can get it at really good terms, it could be worth considering.

(2)
U
Undisclosed #2
Nov 05, 2018

Yes, I would be very surprised if Convergint didn't give Chubb a solid look over. The amount of competitive intelligence detail would be too good to pass up.

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UM
Undisclosed Manufacturer #3
Nov 05, 2018

I would agree. Chubb Canada might have some value; more in Atlantic Canada than the rest of the country. They do have some good long term accounts, specifically in the Banking/Financial verticals. I believe the value to Convergint would be in the U.K. and Australia, where Chubb has a significant presence.

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