GE Security Sale -- UTC to Buy GE Security

By: John Honovich, Published on Nov 09, 2009

UTC has agreed to buy GE Security - confirmed directly by UTC. Nonetheless, GE Security suffers from significant competitive problems that are widely acknowledged and lamented by members of the security industry.

Background

In August 2009, Bloomberg reported that JP Morgan has been hired to sell GE Security. The division reported $1.8 B USD revenue in 2007 and expects an acquisition price in the range of $2 B USD.

On November 12 2009, UTC announces acquisition of GE Security for $1.8 Billion. GE Security would likely become a division of UTC Fire and Security.

Review our analysis and discussion of UTC's plan for GE Security.

Update March 1, 2010: UTC-GE Deal finalized.

UTC Company Profile

Despite UTC Fire and Security generating about $6 Billion in annual revenues, their product portfolio in security is shallow. For instance, 60% of revenues are from service and installation.

Access control is a strong area with their Lenel division being one of, if not the leading, physical access control manufacturer (acquired in 2005 for $440 Million as noted in UTC's 2005 Annual report).

The overlap between GE's Casi Rusco product offerings and Lenel will be significant. Both product lines have substantial customer deployments but Lenel's product development over the last 5 years has far surpassed that of GE Security's physical access control. Does UTC keep both? Do they wind down the GE product line or spin it off? Lenel's product strengths give it a clear edge over GE Security's offering and likely spells more troubles for GE Security's access control customers.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

UTC is weak in video surveillance and the additive effect of GE Security's video is questionable. Lenel lags in video surveillance and earlier this year partnered/OEMed their video to OnSSI.

Feedback on UTC Acquiring GE Security

SSN has extensive feedback and commentary from a UTC executive and an industry analyst. Additionally, UTC specifically calls out the Edwards fire business as a key strength. UTC wants to increase service revenues from the more traditional product business of GE Security. However, the problem with the video and access businesses are that the products are weak. It will be hard to drive up service revenue in the long run based on a weak product portfolio.

Power in Security?

While GE Security has sizable sales (reported Top 5 2007 revenue in video surveillance according to IMS), rarely do GE Security products stand out.

At least in video surveillance, I cannot think of a single recent GE product that I found to be innovative. And never has any end user or integrator contacted me asking for information on GE Security products (amazing given GE Security's size and the fact that I get hundreds of requests).

I am not sure what competitive advantage an acquirer would get from GE Security (though I suspect they are stronger on the alarm side, e.g. Mastermind seems fairly dominant). Multiple analysts are reporting that GE's real strength is in the Fire market.

SSN has an interview with a GE Security dealer who is not happy with GE, citing GE's failures to keep commitments. The dealer says the main attraction is the value of the GE corporate brand. With numerous unhappy dealers and consultants (see comments below), a lagging product portfolio and no GE brand to leverage, the value of GE Security to an acquirer looks questionable.

Community Consensus - GE Security Deep Problems

As the comments below from dealers and integrators demonstrate, GE Security has significant problems:

  • "I can't think of a single company that was made better after acquisition by GE, and many that were made considerably worse."
  • GE is "probably the worst of the Big Corporates" in regards to "how well the products they produce serve the security community"
  • "For a while they seemed to buy anyone that would sell, and in many cases their purchases were redundant or devoid of real strategic value."
  • "They have had good opportunity to develop innovative, integrated solutions, but instead appeared to completely lose focus on their goals."
  • "GE's products just seem like old technology to me"

Bidding War

Bloomberg is speculating on a bidding war for GE Security. Take a look:

Given the price of the deal, it does not appear that a bidding war occurred. The price is especially weak, considering the current bubbling global markets.

Good for the Industry

This sale and its implict acknowledgement of GE Security's problems is actually a good thing for the industry and has the potential to spur growth and foster quicker adoption of more innovative IP product offerings.

What Do You Think?

While I talk to many GE Security alumni (who all cite GE Security's multitude of problems), I rarely talk to or are contacted by GE Security employees.

[premium_content]

5 reports cite this report:

Lenel President Is Out (Now At ACRE) on Apr 20, 2017
Lenel's challenges continue. Now, Lenel's President is out, suddenly. This follows increasing challenges for the company who has broadly upset...
UTC / Interlogix / Lenel Layoffs 2016 on Feb 25, 2016
Multiple sources have confirmed to IPVM significant layoffs inside of UTC's security divisions - notably Interlogix and Lenel. In this note, we...
UTC-GE Closed: What Becomes of GE Security's Products and Brands? on Feb 28, 2010
Important new information on the future of GE Security's products and brands have been disclosed as part of the formal confirmation that the UTC-GE...
What's the Best Video Surveillance for a Hotel Chain? on Dec 14, 2009
What's the best video surveillance solution for a hotel chain? In the US alone, there are about 50,000 total hotel properties requiring safety and...
Is UTC's Plan for GE Security a Mistake? on Nov 13, 2009
UTC's Fire and Security CEO is beginning to reveal UTC's plans for GE Security's assets. We think two of the most important are risky. Here are...

Related Reports

Access Control Job Walk Guide on May 22, 2019
Significant money can be saved and problems avoided with an access control job walk if you know what to look for and what to ask. By inviting...
Facial Recognition Systems Fail Simple Liveness Detection Test on May 17, 2019
Facial recognition is being widely promoted as a solution to physical access control but we were able to simply spoof 3 systems because they had no...
Maglock Selection Guide on May 16, 2019
One of the most misunderstood yet valuable pieces of electrified hardware is the maglock. Few locks are stronger, but myths and confusion surround...
Milestone XProtect 2019 R1 Tested on May 15, 2019
For the past few years, Milestone has released quarterly software updates XProtect VMS platform. What is new and how much impact do the updates...
San Francisco Face Recognition Ban And Surveillance Regulation Details Examined on May 14, 2019
San Francisco passed the legislation 8-1 today. While the face recognition 'ban' has already received significant attention over the past few...
Access Control Request to Exit (RTE) Tutorial on May 13, 2019
For access controlled doors, especially those with maglocks, 'Request to Exit', or 'RTE' devices are required to override electrified locks to...
Mining Company Security Manager Interview on May 10, 2019
First Quantum Minerals Limited (FQML) is a global enterprise with offices on 4 continents and operations in 7 countries with exploratory operations...
10 Facial Recognition Providers Review (Secutech) on May 09, 2019
Adding to our 19 Facial Recognition Providers Profiled report from ISC West, IPVM focused on facial recognition technology for our Day 2 coverage...
Proxy Access Control Tested on May 09, 2019
Silicon Valley Access Startup Proxy raised $13.6 Million in May 2019, focusing on mobile physical access control. Beyond the fund raising, Proxy...
Restaurant Security Manager Interview on May 06, 2019
Wright’s Gourmet House in Tampa, Florida has been around for over 50 years. During most of that time, there were no security measures in place. Now...

Most Recent Industry Reports

Verkada Video Quality Problems Tested on May 23, 2019
Verkada suffers from numerous video quality problems, not found in commercial IP cameras, new IPVM testing of Verkada vs Axis and Hikvision...
Average Frame Rate Video Surveillance 2019 on May 23, 2019
What is the average frame rated used in video surveillance systems? In IPVM's 2011 statistics, the average was 6-8fps increasing to ~10fps in...
Access Control Job Walk Guide on May 22, 2019
Significant money can be saved and problems avoided with an access control job walk if you know what to look for and what to ask. By inviting...
US Considers Sanctions Against Hikvision and Dahua on May 22, 2019
The US government is considering blacklisting "up to 5" PRC surveillance firms, including Hikvision and Dahua, Bloomberg reported, with human...
Dahua USA Celebrates 5 Years of Errors on May 21, 2019
Dahua USA is, in their own words, 'celebrating' 5 years in North America or as trade magazine SSN declared: Dahua Technology finds success in...
Axis ~$150 Outdoor Camera Tested on May 21, 2019
Axis has released the latest in their Companion camera line, the outdoor Companion Dome Mini LE, a 1080p integrated IR model aiming to compete with...
Covert Facial Recognition Using Axis and Amazon By NYTimes on May 20, 2019
What if you took a 33MP Axis camera covering one of the busiest parks in the US and ran Amazon Facial Recognition against it? That is what the...
Amazon Ring Public Subsidy Program Aims To Dominate Residential Security on May 20, 2019
Amazon dominates market after market. Quitely, but increasingly, they are doing so in residential security, through a combination of significant...
LifeSafety Power NetLink Vulnerabilities And Problematic Response on May 20, 2019
'Power supplies' are not devices that many think about when considering vulnerabilities but as more and more devices go 'online', the risks for...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact