An active six months for M&As

Jul 1, 1998 12:00 PM, TINA D'AVERSA-WILLIAMS

Industry Outlook The greatest growth areas for security products through the year 2000 will be the CCTV sector (including cameras, time-lapse recorders, accessories) and remote video surveillance equipment. So says a March 1998 qualitative feedback survey of commercial security directors by PRIMEDIA Intertec's Research Group for Access Control & Security Systems Integration. Card access remains a close third in predicted growth, and other electronic access control, including biometric identification, ranks fourth, according to the survey.

Forty-nine percent of survey respondents indicated they will purchase one or more of these security products in the next year.

High demand entices new companies to enter the security market and sparks product development by current market leaders. Digital video, for example, is a major growth area.

Companies are branching out. Many card access control system providers now offer CCTV and biometric systems. Likewise, companies specializing in CCTV products are buying or developing electronic access control systems.

Partnering among companies offering complementary products is on the rise. One example is card access manufacturers partnering with biometric developers to offer integrated biometrics and electronic access control.

Here is a look at highlights of security company mergers and acquisitions for the first half of 1998: * Gyyr, an Odetics Co., Anaheim, Calif., a manufacturer of intelligent video solutions, merged with Intelligent Controls Inc., Lynnwood, Wash., manufacturer of access control products, specializing in PC-based, remote-site and fiber-optic communication. According to Gyyr president Frank Borst, "With ICI, Gyyr gains several new, breakthrough communication technologies and a flexible access control system designed for compatibility with a variety of access control sensors."

* Biometric Access Corp. (BAC), Austin, Texas, acquired the technology and assets of Identification Technologies International, a manufacturer of facial recognition systems. According to BAC executive vice president of sales and marketing John Shepard, the acquisition makes BAC the first company to offer both fingerprint and facial recognition technology.

* Honeywell Inc. purchased the stock of Westinghouse Security Electronics Inc. (WSE). "This transaction allows Honeywell to add to its successful control product portfolio and expand distribution channels for electronic access control products," says Albrecht Weiss, president of Honeywell's Home and Building Controls Products Business. WSE will become part of the home and building control division, with an emphasis on global growth through the dealer network.

* Amtech Corp. sold its Transportation Systems Group (TSG) to UNOVA Inc., a $1.5 billion industrial technology company with headquarters in Beverly Hills, Calif. Amtech, provider of radio frequency identification (RFID) technology solutions for intelligent transportation applications, broadens its offerings to the marketplace. UNOVA will acquire the brand name Amtech as part of the transaction. The Amtech Electronic Security Group markets electronic access control and security management systems, services and products u nder the Cotag and Cardkey brand names.

* Protection One acquired Comsec Narragansett Security Inc. for a cash purchase price of approximately $45 million and the assumption of $15 million in debt. Comsec has more than 30,000 subscribers located primarily in Connecticut, Maine, Massachusetts and New Hampshire and approximately $1.3 million of MRR. Comsec, a Sonitrol franchiser and distributor, also has significant tax assets and rights of first refusal to acquire a number of Sonitrol franchises.

James M. Mackenzie Jr., Protection One's president and chief executive officer says, "We plan to aggressively expand our dealer program and complete numerous smaller acquisitions to increase Protection One's share of New England to levels we enjoy in California, Florida and Texas."

Protection One provides monitoring and related security services to commercial and residential subscribers across the nation.

* Borg-Warner Security Corp. sold its Wells Fargo Alarm business to ADT Security Services, a subsidiary of Tyco International Ltd. Borg-Warner is one of North America's largest providers of security services. The company's services include electronic and physical security under the Wells Fargo and Burns brand names.

Tyco International, a diversified manufacturing and service company, acquired a sufficient number of shares of CIPE to gain majority voting rights. CIPE, headquartered in Lyon, France, has revenues of approximately $230 million and is a provider of electronic security services and equipment throughout Europe, including Belgium, the Netherlands, Spain, Germany and Switzerland. The company will be integrated with Tyco's ADT operations.

* Pinkerton acquired Kobra, a security company in the Czech Republic. Kobra provides uniformed security officers and patrol, alarm response and secure transport services. "The Czech Republic is a key focal point to our business development in Eastern Europe," says Larry G. Woelk, Pinkerton vice president of International Operations.

Pinkerton has more than 250 offices and 47,000 employees throughout the United States, Canada, Latin America, Europe and Asia. The Encino, Calif.-based company provides uniformed security officers, investigations, security systems integration, pre-employment selection, and consulting and risk assessment.

* Hirsch Electronics Corp., Irvine, Calif., acquired Westar Systems, Santa Ana, Calif. Hirsch obtained the sales, marketing and product development operations of Westar, but did not acquire Westar's contracting operations.

Offering analysis and commentary on the security industry at large, our goal is to keep readers informed of the market growth and forward movement within the industry. The column is written by Tina D'Aversa-Williams, publisher of Access Control & Security Systems Integration, whose background includes work in market research and analysis.

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