Fire and Security Consolidation Continues into 2010

January 20, 2010

In November 2009 UTC [United Technologies Corp] announced the acquisition of GE security which includes the Edwards Fire Systems business for $1.8B. This transaction is expected to be completed in 2010.

In November 2009 Minimax Gmbh and Viking Group announced their merger to create a significant competitor in the fire industry, particularly in the USA, with total sales in excess of $1B.

And it continues…

On January 19, 2010, Tyco International announced the planned acquisition of Broadview Security, formerly Brinks Security, for $2B. This acquisition will create position Tyco International with its ADT, Simplex Grinnell brands now along with Broadview as a leader in the residential and commercial security markets. Chief Executive Ed Breen said in a statement.

"Broadview's strong presence in the North American security market ... will enhance ADT's financial performance and support our long-term growth in this large, fragmented and highly competitive industry," Breen said.

The acquisition is likely to be completed in 2010.

With UTC, Tyco and Minimax all making significant progress in consolidating the USA Fire and Security markets, one must wonder will Honeywell and Siemens sit on the side or are there more moves to make?

Also, clearly the integration of these newly structured combinations will have an effect on the distribution channels. Which distributors will survive in local markets? How do independent distributors compete against corporate owned distributors? Many unanswered questions.
Certainly, 2010 is a year of big changes and 2011 will be the year of the fallout from those changes for both the Fire and the Security industries.

Bob Coleman can be reached at:
rfc@paramaxcorp.com or 716-626-1200, ext 234

Paramax mainly sells middle market closely-held businesses and business units of Fortune 500 companies. Our transactions range in size from $5 million to $500 million. We have completed in excess of 200 transactions since 1992.

Paramax Corporation, [and subsidiary, Paramax Securities, LLC, FINRA member and SEC registered broker-dealer] is headquartered in Williamsville, NY, with additional offices in Rochester, NY, and Boston, MA. Our team of 14 possess diverse and experienced operating backgrounds in finance, accounting, law, engineering, and banking.