ADT / ASG 'Merger' Acquisition

By: John Honovich, Published on Feb 12, 2018

ADT, the $4 billion annual revenue security giant, recently publicly traded again, has merged with security integrator Aronson Security Group, according to a message from Aronson Security Group's (ASG) CEO Phil Aronson [link no longer available].

In this note, we examine the 'merger', the rationale behind this and how it might help ADT, whose IPO challenges have become a public problem.

***, *** $* ******* annual ******* ******** *****, recently ******** ****** *****, has ****** **** ******** integrator ******* ******** *****, ********* to * ******* *********** ******** *****'* (***) *** **** ******* [link ** ****** *********].

** **** ****, ** examine *** '******', *** rationale ****** **** *** how ** ***** **** ADT, ***** *** ********** have ****** * ****** problem.

[***************]

ADT *********** ** **********

***'* ******* ** ************** residential *** ***. *** company's ********** *** ********** integration ******* ** * distinct ********. * *** factor ** **** ****** **** ***** ** Tyco **** *** *** Tyco **. ** **** ** this *****, *** ****** the *********** ******** ***** with * ********* *********** on ********* ** *** commercial / ********** *********** ******.

*** *** ***** * number ** ***** ****** back **** ***********, **** recently ********* ** ***** MSE [**** ** ****** available] *** ******* ***** Gaston ******** [**** ** longer *********].

ASG **********

*** ** * ************ Northwest *** ******** **********. However, *** ******* *** differentiated ****** **** *** marketing ******* ** *** ******* ********** **** is *** * ******* integrator. ** **********, *** has********** *** **** ** Value, *********** ****** ** essentially * ******** ********** that **** ******* ***********. More ** **** *** integrator ** **** ****, ASG *** **** ********** promoting *** ******* ******** by ****, *********** *********'* ***. ***** ****** '***** ************' conference [**** ** ****** available] ** ***** **** in * *** *****, which ***** **** '******' should ** ***********.

Aronson ** '******'

*** *** **** ******* sent *** * ********** '***** **** ********* **** Success **** ***':

**** ** ** ******** 'merger' ***** **** ***'* revenue ** ~**** ******* than ***, ***** ******* is ****** ****** ** $50 ******* **** ***'* $4,000 *******. **** ** more ****** * ******** or ** ************ ****** than * ******* ******. If ** **** ** receive ******** ** **** from ****, ** ***** update.

No ************ **** ***

**** ******** ** **** no ************ *** **** made ** ***. ** a ******** ****** *******, if **** ***** ****** with ***, **** ***** likely ** ******** *********** that ***** **** ** be *********.

Update - ************ ***** *, ****

**** **** * ***** after ******* **** *** the **********, *** *** issued * ****** ************, confirming ** ** ** acquisition, *** ******:*** ******* ********** ************ **** Acquisition ** ******* ******** Group (***)

Good *** ***

*** ***, **** ***** be **** **** ****. Not **** **** *** get **** (** ***** expect $***+ *******), *** says **** **** ****** as * ******* ****** ADT, ******** **** ** continue ***** ****** *********** and *********. **** ***********, if *** ******** **** ********* and *********** ** *** rest ** *** *****, ASG *** ** **** to ******** ***** ******* efforts **** *****-***** *** users.

ADT ******

***** *** *** ****** has ******* *********** ******** for *********** *********'* *** growth *** *********** ***********, commercial *** ********** *********** provides * *************** **** in * ****** ***** DIY ** **** **********, given *** ********** ******** in *** ******* ******** and **********.

** *** ****** **** ADT *** ******** ** acquire ******* ***********, **** may ** **** ** build ***** *** *********** group. *******, ** ***** be ****, ***** ***** lack ** ***** ** this ******* ** *** market *** *** ********** of ********* ******* ***********.

Convergint ****** / *********** *********** ***** ****** ***

**** *** **** ********* to**********'* ******* ****-** ** integrators. ** *** **** side, *** ** *** bigger **** **********. ** the ********, ********** ** far **** ******* *** experienced ** ****** ***** systems ***********.

********, *** *** **********'* acquisitions ******** ** ****** the ****** ** ****** independents **** ******, ***** are ************ * **** breed.

Comments (38)

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

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.

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.

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

Counterpoint: Ving Rhames is cool forever.

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. 

 

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

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

Like someone calling this “Dinner for Two”:

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.

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.

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.

Pick the best restaurant in your town.

Now imagine it being bought by Waffle House.

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

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...

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.

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

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

#4, can you clarify? 

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.

Thanks and case closed! ;)

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.   

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.

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

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?

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.

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.

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. 

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.

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.

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

Is this the announcement we were expecting?

Looks like free yard signs for the Great Conversation attendees.

Oui.

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.

 

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.

 

Yes, thanks for that link Michael and hot off the press with today's date.  I am happy to see an accurate characterization of the merger as an acquisition.  It certainly makes more sense given the size of each company.

Login to read this IPVM report.

Related Reports

Axis Discontinues Companion Hardware, Fully NDAA Compliant on Feb 03, 2020
Axis will be fully NDAA compliant, as the company has confirmed to IPVM it is...
USA's Seek Scan Thermal Temperature System Examined on Apr 01, 2020
This US company, Seek, located down the road from FLIR and founded by former...
Anyvision Layoffs on Mar 19, 2020
Anyvision has conducted a layoff, citing the impact of coronavirus, joining a...
PSIM CNL Acquired By Everbridge on Mar 09, 2020
The end has finally come for CNL. Despite for years saying they would...
Milestone Launches Multiple Cloud Solutions on Feb 18, 2020
Milestone is going to the cloud, becoming one of the last prominent VMSes to...
PDQ Presents Cloud Mobile Access Smart Locks on May 04, 2020
PDQ presented its mobile, wireless access system 'pdqSmart' at the April 2020...
LSP Presents 2nd Generation FP Power Supplies on Apr 29, 2020
Life Safety Power (LSP) presented its FP2 power supply in the April 2020 IPVM...
Bosch Moving Commercial Alarms Manufacturing Out of China on Apr 21, 2020
Bosch is moving commercial alarms production ~6,000+ miles out of China and...
Every VMS Will Become a VSaaS on Feb 21, 2020
VMS is ending. Soon every VMS will be a VSaaS. Competitive dynamics will be...
Bosch Dropping Dahua on Feb 13, 2020
Bosch has confirmed to IPVM that it is in the process of dropping Dahua, over...
Genetec Drops Support for Dahua and Hikvision on Jun 01, 2020
Genetec has dropped support for Dahua and Hikvision, citing US blacklisting...
Sunell Panda Cam Body Temperature Measurement Camera Tested on May 14, 2020
Sunell is far less well known than its gargantuan domestic competitors Dahua...
Motorola Solutions Sells Avigilon Products To North Carolina Utility on Jul 16, 2020
Just 2 years after Motorola acquired Avigilon, concerns are growing among...
Uniview Heat-Tracker Temperature Screening Series Examined on Apr 22, 2020
Uniview is marketing #UNVagainstCOVID19 with their Heat-Tracker series,...
IDIS Presents 12MP IR Panoramic Fisheye on May 26, 2020
IDIS presented its 12MP IR panoramic fisheye camera at the April 2020 IPVM...

Recent Reports

Genetec CEO Declares "We Don't Negotiate Payment With Patent Trolls" on Aug 11, 2020
Are patent trolls like terrorists? Genetec's CEO is coming out strongly...
Hanwha AI Analytics Camera Tested on Aug 11, 2020
Hanwha has released their Wisenet P AI camera, adding person and vehicle...
Alabama Schools Million Dollar Hikvision Fever Camera Deal on Aug 11, 2020
The Baldwin County, Alabama public schools purchased a $1 million, 144-camera...
Dahua Taunts Australian Government, Continues To Sell Illegal Fever Cameras on Aug 10, 2020
Dahua is effectively taunting the Australian government by continuing to sell...
HID Releases VertX Replacement Aero on Aug 10, 2020
HID is replacing two established and broadly supported types of access...
NDAA Compliant Video Surveillance Whitelist on Aug 10, 2020
This report aggregates video surveillance products that manufacturers have...
Telpo China Temperature Tablets Tested on Aug 10, 2020
The provider for overseas companies ranging from Canon Singapore to US'...
Dangerous Hikvision Fever Camera Showcased by Chilean City on Aug 07, 2020
Deploying a fever camera outdoors, in the rain, with no black body, is...
"Grand Slam" For Pelco's PE Firm, A Risk For Motorola on Aug 07, 2020
The word "Pelco" and "grand slam" have not been said together for many years....
FLIR Stock Falls, Admits 'Decelerating' Demand For Temperature Screening on Aug 07, 2020
Is the boom going to bust for temperature screening? FLIR disappointed...
VSaaS Will Hurt Integrators on Aug 06, 2020
VSaaS will hurt integrators, there is no question about that. How much...
Dogs For Coronavirus Screening Examined on Aug 06, 2020
While thermal temperature screening is the surveillance industry's most...
ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
AHJ / Authority Having Jurisdiction Tutorial on Aug 06, 2020
One of the most powerful yet often underappreciated characters in all...
SIA Coaches Sellers on NDAA 889B Blacklist Workarounds on Aug 05, 2020
Last month SIA demanded that NDAA 899B "must be delayed". Now that they have...