November 2009 UTC Announcement

In July 2009, Paramax Corporation's Senior Vice President, Bob Coleman, presented to the Americas Fire and Security Conference in Miami Beach on the topic of industry consolidation. In the past few weeks Paramax’ prediction, based on significant experience in the Fire and Security industry, proved very insightful, as United Technologies Corporation (UTC Fire and Security) announced on November 12, 2009, their acquisition of GE Security in a $1.8 billion deal.

The deal is still subject to government approval and all the legal agreements being worked out. It will likely be a few more months before the closing of the transaction.

Based on our experience, the UTC team is no doubt now in the heat of defining the reorganization plans for overlapping product lines in fire and security, manufacturing sites and distributor map overlaps so that they can obtain cost savings and focus the distribution channels for the new business including the use of UTCFS owned outlets. It will be interesting to see how this evolves in 2010 and the impact it will have on the overall industry.

Also, Stanley’s recent acquisition of Black & Decker has raised the belief that Stanley seems to be a very significant player in physical security (locks, access controls, etc), as well as stimulated some speculation that Stanley may look for electronic security systems next.

Honeywell, Tyco International, Siemens and others are no doubt looking at what all this means and how to respond.

Very interesting times are ahead for the Fire and Security Industries.

With big changes in the industry and likely higher capital gains taxes coming in 2011, if not earlier, Paramax is available to assist clients in exploring exit strategies.

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

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