ADT / ASG &#x27;Merger&#x27; Acquisition

IPVMU Certified

ASG is the best security provider I've ever worked with. All the best to Phil and his team.

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Ross Vander Klok

In reply to Brandon Knutson

IPVMU Certified

You might as well start saying "ASG was the best security provider..." now just to get used to it. My guess is it will be less than a year before ADT chews them up and spits them out. I do hope it is more like the article states though, for everyone's sake.

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Brandon Knutson

In reply to Ross Vander Klok

IPVMU Certified

Ross, I was really trying to be positive on this Monday, but you are right. I can't wait to see ASG tv commercials starring actors that used to be cool.

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Brian Rhodes

In reply to Brandon Knutson

IPVMU Certified

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Brandon Knutson

IPVMU Certified

In reply to Brian Rhodes

Yup. It really pays to be the nephew of Francis Ford Coppola.

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Ethan Ace

In reply to Brandon Knutson

Counterpoint: Ving Rhames is cool forever.

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Marco Sanchez

I will agree that ADT was a pretty bad company and it was always easy to beat them when I worked as an integrator. However, when Tim Whall took over Protection 1 he really turned around the service department and positively impacted the company in various other ways. Service being the biggest. Hopefully that will transition to ADT and now ASG and as John states get them into more of the large commercial verticals.

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Lee Jones

Support Services Group

How to add market value to ADT…. spin off the high attrition residential segments.

The high cost of quality “commercial” acquisitions cannot offset the financial and operational facts…. ADT is still a shrinking “residential” security company. Current slick advertising could distract our attention away from the millions of basic, outdated, “deterrent” systems that are ignored even by local police. Without emergency response, deterrent systems are often treated like nuisance auto alarms, and should be consumer priced accordingly.

Source: Lee Jones; Support Services Group; leessg@att.net

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Undisclosed #1

IPVMU Certified

This is more likely a metaphor or an exaggeration rather than a literal merger.

Like someone calling this “Dinner for Two”:

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John Honovich

In reply to Undisclosed #1

IPVM

A related point, which I just added:

Also atypical is that no announcement has been made by ADT. As a publicly traded company, if they truly merged with ASG, that would likely be material information that would need to be disclosed.

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Undisclosed #1

IPVMU Certified

Maybe it’s the start of a new trend, the euphemistic acquisition description.

If Avigilon could have just partnered/merged with Motorola, dealer apoplexy would have been greatly reduced.

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John Honovich

In reply to Undisclosed #1

IPVM

I know you are joking and I do think it's kind of funny. Avigilon and Motorola announce they've become BFFs or something...

In all seriousness, on the other hand, misrepresenting the 'relationship' has its own downsides as most people can eventually figure that out, causing more trust issues.

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Undisclosed

Pick the best restaurant in your town.

Now imagine it being bought by Waffle House.

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John Honovich

IPVM

In reply to Undisclosed

So is it safe to say you don't work in ADT's marketing department?

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Michael Gonzalez

Confidential

Well, I'm glad I can still work with ASG as ASG...I wouldn't let ADT anywhere near my stuff, don't even breathe on it...

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Undisclosed #1

In reply to Michael Gonzalez

IPVMU Certified

Well, I'm glad I can still work with ASG as ASG...

You might want to find out what the long term retention agreement for ASG execs is. A liquid 100 million payout can displace quite a few.

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Undisclosed End User #3

With such mergers, I hope ADT brings innovations & improvements in their processes and customer offerings.

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Undisclosed #4

There is just a lot of smart mfkers at ASG right now.

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John Honovich

IPVM

#4, can you clarify?

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Undisclosed #4

Well I did sort of one line that, right?

OK, ASG has enough history in the Pacific Northwest and speaking with many of friends that work there now or have in the past, each one has always cited respectful comments about ASG culture. I always thought I might end up there one day but never made back to Seattle. The weight of my one line statement comes from the fact that I always enjoy reviewing bids and designs by other companies I have not worked for and find it amusing how all this data makes its way around, um thanks LinkedIn for your networking. Seeing other peoples responses to RFPs etc., I always look at sales rep, applications engineer or architect, I then review that person on every level I can. I have encountered a lot of good design work, written scope, warranty qualifications originating from ASG or certain people in the security sector. Sometimes I can recognize the CAD line work from individuals encountered in the past; even when some of that content comes from other organizations and companies. It is easy to spot the security guys wit, logic and industry viewpoints. Kudos to ASG on their new relationship, bravo. However, I feel that if ADT does not have the tempo to match the ASG culture there could be fallout but you never know when, where or which department is going to take the hit first. Is this opinion going to sink the ship? Probably not! resilience is accrued thru attrition and not CASE CLOSED mentalities (had to go there, for those in the know-LOL). I wish the best to my Northwest buddies and ASG. Ain't done today, Ain't done tomorrow.

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John Honovich

IPVM

Thanks and case closed! ;)

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Undisclosed #1

IPVMU Certified

Please don’t encourage him :)

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Undisclosed

That's a good way to say it. One wonders if ADT -- this week's ADT not your grandmother's ADT -- has the tempo to match the (badass) ASG culture. It may well be able to do it. Huzzah to them if they do.

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Michael Gonzalez

Confidential

I have to agree, every one of the engagements I've had with them have been very helpful, they definitely know their business. I'm looking forward to seeing what comes out of it.

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Brandon Knutson

IPVMU Certified

In reply to Undisclosed #1

There has been nothing they couldn't fix or integrate. I think smart mfkers means top level leadership and engineering talent.

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Undisclosed #1

•Feb 14, 2018

IPVMU Certified

Is there no other confirmation, verbal or otherwise, of the transaction besides the newsletter?

Not that I doubt it, but it’s strange.

Also, even if the acquisition by one company is of one much smaller than itself, I imagine it could make a material difference to an investor.

In that case, ASGs newsletter might be viewed as selective disclosure, no?

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John Honovich

•Feb 15, 2018

IPVM

Is there no other confirmation, verbal or otherwise, of the transaction besides the newsletter?

I still have not seen anything official.

But in terms of verbal, people have been talking about it at least a week before we reported on it. At first, I dismissed it, thinking that people were conflating it with the 2015 merger with Maryland based ASG.

As many commenters have noted, it is also an atypical combination.

In that case, ASGs newsletter might be viewed as selective disclosure, no?

I would think a man like yourself would be cheering the innovation of a merger announcement by mailchimp newsletter...

In all seriousness, I am not sure what the criteria / metric is for having to disclose information (i.e., what counts as being material enough to have to report). However, one point of metric is available. ADT did disclose acquiring MSE even though MSE 'only' reports $25 million revenue, significantly less than Aronson. At least based on that comparison, it would indicate ADT should properly disclose.

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Undisclosed Integrator #5

•Feb 14, 2018

Call it a merger or aquisition- it usually ends up a murder and accusations.

But really, ADT back in the day had some very sharp acquisitions that were left alone - CCTC back in the '70s were a good example- A Montreal based company focused on Casinos and Rail video systems.

The only way CCTC survived was that they had a very strong director of operations who told ADT to leave them alone.

Otherwise, the culture gets damaged and the people who make the company special end up elsewhere.

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Larry Tracy

•Feb 16, 2018

10 billion in debt and high discontinuance rate obviously presents a huge challenge.

Tim Is smart guy but with DIY, Comcast and other mass market guys he has a big monkey on his back but I wouldn't bet against him and Jamie.

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Undisclosed Integrator #6

•Feb 20, 2018

ASG has a lot of talented employees. Kudos to Ron Worman and The Sage Group for an unrelenting marketing campaign that was launched over a decade ago. That marketing vision (tweaked along the way of course) shaped ASG into the company they are perceived as today. This "merger" has probably resulted in a very good pay day for those who were lucky enough to hold a stake in the company.

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John Honovich

•Mar 01, 2018

IPVM

Still no official announcement more than 2 weeks later, which is highly atypical. ASG's event is next Monday so it will be interesting what they say there.

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Undisclosed Integrator #6

That is unusual. Fake news or a marketing ploy to generate more buzz and potential participation in their event??

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Michael Silva

Silva Consultants

Is this the announcement we were expecting?

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Brandon Knutson

IPVMU Certified

Looks like free yard signs for the Great Conversation attendees.

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Undisclosed #4

Oui.

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Undisclosed

Kinda. ADT does commercial? I thought they got out of that business when Tyco/IS was created. I thought ADT only did small business (things small enough that the 3-door system advertised on their web site would be a fit.)

Is there an ADT integrator business? I mean, pre-ASG/ACME.

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John Honovich

•Mar 03, 2018

IPVM

Michael, thanks!

From ADT's website: ADT Expands Commercial Capabilities with Acquisition of Aronson Security Group (ASG)

Unsurprisingly, ADT calls it an acquisition, not a merger.

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Undisclosed Integrator #6

•Mar 03, 2018