ADT Acquires Red Hawk, Becomes Billion Dollar Commercial Business
With its ~7th commercial acquisition in the past year, ADT is transforming itself from a residential provider to a commercial player with now more than a billion dollars of annual commercial sales.
ADT has announced [link no longer available] it will acquire Red Hawk Fire & Security for $317.5 million in a move which fundamentally changes the direction of the company and "accelerates its growth."
Does the acquisition make sense, given ADT's residential core? How will this purchase and ADT's continued shifting in focus affect the industry?
Inside this note we look at:
- Financials of the Deal
- Strategy for ADT
- Former Acquisitions
- Commentary from industry experts including John Brady and Peter Giacalone
- Effect on the Industry
- Possible Problems
Financials ** *** ****
*** ** ****** $***.* ******* *** Red ****, ***** ** ******** ** bring ** $*** ******* ** ******* for ****:
*** *********** **** ******* ***'* ******* sizeable ********* *** ***** ** ******** them ****** **** **** ********** *********** and ****. ***** *** ***** **** industry ********* ******* **** ***** *** Peter ********* *** *** *** **** wanting ** ******** ***** *** **** ***********'* ********** ***-*******.
*** *********** ** ******* ** **** to*********' *********** ** ******* ** ****.
Billion ****** **********
***********, ***, * $* ******* *******, says *** *********** ****** *** ******** total ** ********** ******** ******* *** ADT ** **% ** *** ***** revenue, ******* *** ** *** * $1 ******* ****** ** *** ********** space:
Commerical '******' *** ***
*** **** *** ********** **** ** a "******" ** ***** ******** ***** forward:
*** *** **** ** ** *********** mode, **** ******* ************ ***** ** Red ****.
Other ************
** ******** ** *** ****, *** has **** ********:
- ******* ******** ***** (***) ** ***** 2018
- ****** ******* *********** (***) ** ****** 2018
- ****** *******, ***. ** ****** ****
- **** ******** ******* ** ***** **** [link ** ****** *********]
- ********** ** ******** **** [**** ** longer *********]
- ****** ******** ** ******* **** [**** no ****** *********]
- *** ********* ******** ** ********* ****
** ** ***** ****** **** *** Hawk *** **** **** ** *********** mode ******:
- *** ** **** ****
- *********** ********** *******, ***. ** ******* 2018
- **** ************** ** ******* ****
- ****-****** ** **** ****
- ***** **** ********* ** ******** ****
*** ** ***'* ************ *** ****** it ****** ** **** ** **** to ** *** **** ** ***** to ** *****, ********* ** *******.
Return *** **** ****
******** ********* ******* **** ***** [**** no ****** *********] ***** ************* ***** ********* [**** ** ****** available] *********** *************** **** **** ***** *** ***********.
***** **** *** ******** ** *** Hawk *** * "************" ** **** ADT *** ****** **** ***** **** Tyco:
**’* * ************ ** **** **** decided ** ** *** ****** *** **** hold ****** *** ****. **** *** split ****** *** *** **** *** residential ********, **** *** * ****** that **** ******’* ** ** *** commercial ***. ** *** [*****] *** his **** *********** ******* ** ****** into *** ***** ********** ** **** as **** *****. **** ****** *** a *** ******** ******* ********. ****’** been ******* **** ** ****** *** integrated *******, *** *** **** ** a ********** *********** ** *** **** into ****.
********* ******, ****** *** ******** *** *** a ********:
**** ***’* *** ******* ** ********** was ****, **** ********* ** **** to ****** **** **** **********. **** isn’t ****** ******** ****. **** ** who **** **** ** *** ****. I *** ******* *** ********* **** this ** ******. ** ***** ***** sense ** ****. **** **** ** expand ***** ********* *** *** **** is * *********** ********** **********. ********** is ***** *** ** **** *** it’s ***** **** **** ** ** back **. **** ** ********* ****—****** it *** *** **** ** ****** else—was ***** ** ******. **’* * very ***** **** *** ***. * think ****’** ***** * **** ***. Their ***** ****’* ********* ****, *** I ***** *** [*****] *** **** a **** ***. * ***** **** is * **** ****** **** *** them **** **** *** ** ** to ***** **** **** ** ***** a ****** ********** ********.
***** **** ****** *** **** ** is ********** ** *** **** *** Hawk ** * ****** ********** **** integrator:
**** ** * ****** *** **** that ************ **** ****’** **** ****** to ** * ****** ****** **** they ***** **** ****, *********. ** doesn’t **** **** **’* * **** based *******, ***. **** *** ** happen, **’* **********, **'* *** *** AHJ ****** **. *** *** *******, you *** ***** *** ***********. *** Hawk *** **** ****** **** ****** the ******* **** **.
*** ** **** *** ******** ** something *** **** **** ***** ****-**** financial ********:
Effect ** *** ********
*** **** *** ** * **** formidable ****** ** **** *** *********** and ********** **** *** ******** ******, according ** *****:
*** ****’** **** *** **** ** a *********** ******.
***** ******* ** *** ******** *** include * **** *** ***** ****'* ********** ******,********** **********. *** ** *** ****'* ********--********* at ~**,***--*** ********* ********* ** **********. It *** ** ******* **** **** will *** **** ** ***. ******* tell **** **** ********** *** ******* 500-800 ******** ********* ********.
Possible ********
***** *** ********* ******* ** ***** with ***** *** *********** ** * good ****, **** ******* **** ******** [link ** ****** *********] ******* *********:
(*) *** ****** ***** ** ******* the ******* *********** ***** ********** **********. By *********** ************ **** **** ***********, they **** **** ** **** ********* to ******* ** **** ****** **** differing **********, *.*., *********** ** **********.
(*) *** ** ********* ********* ** a ***** (********** ***********) **** ****** valuations *** ****** ********** ************ **** their ********** **** (***********). ****, ******* of ****-*******, ***** ** ** **** plan how **** *** ** * ******** commercial ********** ********. ** ***** **** of * *********** **** **** **** cannot ***** *** *********** ****** ** they **** ********* **** * ************ financially ****** *****.
(*) *********** *** ***** ******* *********** (including *** **** *** *** ******** numerous *********** ****** ** *** **** 2 *****) **** ** *********** ** they **** ******* *******, ********, ********* methods, ***.
Vote / ****
*****.
*********** ** * ***** *** ***. Big **** *** ******** ***** ***** recognition ** * *** ** ***** medium *** ***** ********** ********, *** acquiring ****** *** ******** **** **** they're ***** ****** **** ** ******** their *** ******* **********, **** ******* quality *** ***** ******** *******. *** salespeople *** *** **** ********** ********, systems *********, *** *********** ***** **** things **** ************* *** ***, *******, or ******.
*********** ** * ***** *** ***.
** *** ***** **** ** **% of ***** ******** *** **** **** are #* ** *** ****** *** is * *****? * ** *** even ****** * ******** *** ****'* a ****** ****** ******** ** ** in.
** *** **** *** ******** ****** in * ***** ******, ***’* ************ expand **** * **** ********** ****** too.
*** *** **** *** ********* **** they **** * '***** ******'? :)
* ***** **** ** **** **** commercial *********** ** ***** *** *********** guys **** ** **. **'* **** a *** **** **** * *** years *** ***** *** ***** *** money *** ** *********** *********.
*** *** **** *** ********* **** they **** * '***** ******'? :)
***, ******** ***'* *********** *******.
** ** **** *** ******* ** large ********** ************* ******* ***** *** IDS *** **** ********* **** ****** are ****** ****. * *** *** that ** ***** *** ******** ***** any ** *** ******** **** *** causing *** ****** ** *** ********** locations. ** ***** **** ***** ** diversify **** * **** ********** ******** but **** ***** **** ** *** ADT *** *** ************ ******* ** IDS *** ****? ********** ** * public ******* ** ***** ** **** to ******** ********* *** ***** ******* in ******* ********** ********* ********.
** ******* *** *** ** ***** looking ** ***/****** ********** ********* **** the ******* ***. **** *** *** said ***** *** *** **** ** security “************” ** ******** ** ***** “deterrent” ******** ***** ********* (****, ** police ********). ****** ***********. **** ********* and ********** ********. ** * **** to ****-*** ********** “*********” *********, *** push **** ***** ******* ***** **** sense (****** ******** ****** ********). ***, ADT ***** ***** ** * ********** leader, *** ***** **** ******* ***** garbage *** ******, ***** ***** **** ***** stock **** ****** ******.
******: *** *****; ******* ******** *****
***,
**** ******* ** * *** ********* with * *** ** ********** *** no **** ** ********. *'* *** saying ***'** ***** ***, ** ***** be *********** ** **** *** *********.
*** ** *** "**" **** ******** the *** ** "*****" ******* **** the ***/****** ***********...***, ** *** **** any ******* *** **** ******?
** *** **** *** ******* *** the "****, ** ****** ********" *******?
***** ***!
***, *** ******* *** ** **** compare ** *** ********** ***** ** Convergint?
**** ***** / ********.
*** *** ********** *** *** ***** the **** ****. ** ****** *** ADT...
*** ** *** ***********, ***, *** is *** * ****** *** ********** integrator. *******: ********** ************ ********* ********** ******
******* * ********** ******** **** **** a *********** ****** ** ***** ******* sheet *** ****** ******* ******* **** what **** *** ********** **. **** will **** ** **** ** *** debt ** ******* *** *********** ***** on ** ******* *** **** *** change ** *********, *** *** **. This **** **** ***** ***** **% with *** *** ** ***** *** separate **********. ** **** ** *********** how **** **** **** **** ** their **** ********* *******.
***** *** ******* ***** ******* ** large ****** -**% ** *****. *** would ***** ** ******* ** *** the **** ******** ***** ****** ****** on ********* **** **** ********* (******** staff ********** ******** ** ********** **** with ****/***). **** ****** **** *** transferring *** ********** ******** ***** **** swallow **** ***********.
**** **** ***** ********* ***** ***** from ********** ***** *** ** ******** from ***** **** *********** ********?
*** **** *** **** *** ** the ******* *** ****** ** ****** this ***********?
*** ***** **** ** ****** ******* **************, ***. ** ******* **** ** **** **************.
******* ** *** ****** ******** ** ADT *********** ********** ** ** ** 2019...
****** ** **** ($***) */ * now ****** ******** ***** *********** ****** no *** *** *** **** ****** managed ****** *******...📉
*'* ********* *** *** ** ********** in *** ***** ********** *** *** Fire ******** ****** *** ****** ******** and ********** "***********" ** ***? * have ** ******* **** *** ** team ** ******** *** ****** ******** under *** *** **** *** ** are **** ****** ** *** * business **** ** ******* ***** *** Tim *** ** **** *** *** has ************* ********* ********. * ** surprised ** *** ** **** ************ is **** * ***** ****** ** time, ****'* * *** ** *********** into *** ****! *** **** **** or *** ***** **** ************ ** the *******?
*** ******** ********* *** *********** ** ******** Cabling ******* ** ****** ****, **.************ *** ******* ** ******, **, Tulsa *** ******** ****, **, *** Ozark **. ******** *********** ** "*** installation *** ******* ** ********** ******* including ********** *******, **** ***** *******, audio/video, ****, ****** *******, ********* *********, intercom/paging *******, ***** ****, *** ****** protection *******."
“*** ******** ** ******** ** **** of *** ***** ** ********** ******,"*** Commercial ********* **** ********* *** ********** said ** *** *******. "[**** ***********] underscores **** ***’* *** *** ****’* focus ** ********** ********** ** ******* superior ******** ******* *** ******* ** commercial *** **********-***** *************, ************ ***** with ******** *.*. *********."
******* **** *** ****** ******** *** $** ********* ******* ** ****.
*** ********* ***** '*** ********** *****'** *** **** *** ******** **** 1-minute ********* *****:
******* *** ******** ** *** *** the ******** ** *** ****** ** some ***** ** *** **** ** years
*** ******** *** ****** ***** ** a ***** ****** ********