Convergint Damage Control

By IPVM Team, Published on Feb 07, 2018

Convergint needs you to understand.

When Convergint acquires companies, as they continuously do, it is an acquisition, e.g.:

But when Convergint gets acquired, they do not like calling it what it is. IPVM raised this issue in our initial report. Indeed, after our report, they took to a trade magazine detailing their 'financial partnership' with Ares, objecting:

Someone? That 'someone' was literally the company that acquired Convergint, Ares, in the title of Ares' own press release:

Convergint is not making things better and they risk damaging their reputation and trust with their employees and partners.

Positives *** **********

** ** *** ***** that **** ** ** it *** *** **** term with **********. ** **** believe ********** **** **** say **** *********** *** supports ***** ******* *** Ares ********* **** ****** to ***** **********'* ********* team ** **** ********** for *** **** ****. All ** **** ** actually **** *** **** if ********** ********.

Financial ******

****, ** * ******** traded ********** ****, **** deliver ******* ** ***** shareholders. ******** *********** ***** *******, ****** they **** ** ***** with **. ***, ** Convergint ****** ***** ******* over * *********** ****** of ****, **** *** a ************** *** *** power ** ******* *** shareholders.  **********, *** ******** at ***** *** *** Convergint's *****. **'* ****.

Risks *** **********

*********** ******* *** ******* significant *****. ** *** past ****, **** *** started ** ****** ************'* ********* *******, ************ ******* *** problems **** *** ******* changing and * ***** ** numbers:

********** *** ***** **** these *** ******** ** wrong. ******* ** *** the *** ***** *** or *** ***, **** is ************ *** **** that ********** ****.

*** ** ** ******* because ********** *** ******* from * '***' ******* business ** * ******* rolling ** ****** ** integrators ***** ******** ** millions ** ******* **** investors. *** ***** ********* **** returns.

Advice *** **********

** **** ***** **** positive ****** **** *** years ***** **********. *** we ******* ***** **** big *** ** **** in *** ****** *** is *** ** ****.

*** ****** ** ********** is ** **** ****** to ******* ** ******** the ******* **** **** a ******** ****** ********** firm **** **********. ***** the ******* (*.*., ** not ** **** *********). Then ******** *** ******** whether *** *** ****** maintain **** ******** ******* while ****** ** ******** owner, ****** ******** *** all ***** ***********, *** rapidly ********* **** * **** corporation.

Comments (13)

Watch out for the new motivational techniques.


Must be a global conspiracy against Convergint.

Take #2 Convergint damage control. Today, Convergint has a trade magazine interview titled: Exec: Ares/Convergint relationship not a ‘typical acquisition’. Unlike 3 days beforehand when Convergint knocked "someone wants to call it an 'acquisition'", today Convergint acknowledged it:

Convergint’s co-founder and Executive Chairman, admits that Ares’s buyout of the KRG investment in Convergint does qualify it as an acquisition, he couches it by calling it atypical: “(Acquisition) is the proper wording, but the distinction that we are trying to make is that this is not a typical corporate acquisition.

That's much better. Convergint could have avoided all of this by simply calling it what it is, especially since their owner Ares publicly called it an acquisition themselves.


These integrators build their reputations on taking care of customers, and this doesn't necessarily translate at the bottom of a balance sheet. How do you measure trust and loyalty.

When non-security corporations get into the integration game, bad things tend to happen for both the clients and employees who built the foundation which made the acquisition attractive in the first place.

Lets hope Ares learns from the growing pains of Chubb Edwards/Lenel (and the parent company UTC).

When non-security corporations get into the integration game, bad things tend to happen for both the clients and employees who built the foundation which made the acquisition attractive in the first place.

Good point and I agree with you.

I do think it's worth emphasizing who the 'bad things' happen to in this case.

For financial investors, they see more profits - which is a 'good thing' to them. For the end users, they see lower quality and often higher prices - 'bad thing'.

The difference is that the investors are willing to tradeoff reputation and customer satisfaction for more profits, which is the typical driving factor.

To be clear, I do not see that as a risk for Convergint today. However, that is the risk long-term that ultimately the investors push to optimize the business to make more money / profits at the expense of decreasing 'costs' that help serve customers and extracting more revenue out of customers that have some level of lock-in to the company.

2 negative Glassdoor reviews since this post, both with the same theme that the company is struggling with scale, including:

A once proud 'customer-first' culture decaying quickly under the pressure to grow to 'Tyco-size'.

Outliers or a sign of further problems to come?

Another negative Glassdoor review. While the reviewer praises "Annual company community service. Free food at meetings. Quarterly and annual meetings. Employees are nice to each other face to face. Excellent 401K," s/he criticizes various organizational problems:

A cautionary tale....  I have conducted many corporate acquisitions in my previous corporate role.  My experience:  Migrations, Acquisitions and spin-off transactions can be very disruptive to the business of tending to customers. 

Specifically; employees and leadership are so busy with the transition of changing HR policies, Product offerings, new marketing protocols, integrating new SOPs (Standard Operating Principles),  that they take the focus off of running the day to day business - with the risk of time delays and quality - therefore impacting the customer. 

There is - of course the high potential for losing top talent as they are nervous about what the future brings. 

A slow transition helps with employee and client retention.  


Is it common for the acquiring company to offer a "stay on" bonus, or is it considered uncalled for if the senior management requests one?

#4, agreed. From what we have heard so far, Convergint is doing a slow transition. I also agree that this will help employe and client retention.

The other side is the slower the transition, the longer it takes to get the operational benefits of reduced costs and greater uniformity, which financial investors tend to value. Since this is so early in Ares ownership, I doubt there will be any rush for that but it is hard to imagine that not happening, especially when they get closer to putting this up for sale / IPO.

New Convergint video talks about targeting $2 billion revenue in the next 5 years:

Is there any data that indicates how much of Convergint's growth is organic versus via acquisition?  I suppose if they keep buying companies, they can get to $2 billion in sales just by heaping in chunks of acquired revenue.

There's no audited public data, since Convergint is a private company.

However, based on their public statements, a few things can be reasonably discerned. They have acquired 16 total integrators. Assume average integrator revenue is just under $20 million and that is $300 million in acquired business. 

Convergint also cited revenue last year of ~$750 million, so $300 million is a pretty sizeable share of that. Convergint also says they are growing organically at double digits (whether that is 10% or 25% is not disclosed).

But with the new owner's backing and given their public statement that they are continuing this integrator acquisition strategy, I think they could acquire integrators doing another $500 million or so in revenue. Combine that with modest organic growth and they can reasonably be at $2 billion.

The bigger question, to me, is how they scale their culture and operations up with all these different acquisitions, all these people, etc. It does not look easy.

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