ADT Security Services, a unit of Tyco Int’l, announced it would buy commercial security systems integrator FirstService Security, a division of publically traded FirstService Corp., for about $187 million.
Headquartered in Collegeville, Pa., FirstService Security operates under the Security Services & Technologies (SST) brand name in the United States and under the Intercon Security brand name in Canada. Selling off its security division would allow FirstService Corp. to focus instead on its global real estate services, according to Jay Hennick, founder and CEO.
FirstService Security provides a full range of integrated security systems services, including design, engineering, installation, servicing and monitoring of access control, video surveillance and intrusion systems. The business possesses a roster of Fortune 1,000 companies and large regional institutions. Among its customers: Ernst & Young, Manulife Financial, Royal Bank of Canada, University of Pennsylvania, Shell, Toronto Hydro Corp., Verizon and Waste Management. In Canada, the business also offers central station monitoring and guard services.
FirstService reported revenues of more than $200 million during the past 12 months and employs about 2,400 people with 17 offices in the U.S. and Canada.
The acquisition would allow ADT to broaden its reach into higher growth commercial markets, including the petrochemical, education and banking industries, says John Koch, president of ADT North America.
“In addition to evolving our own systems integration capability, we saw acquisition as an appropriate route to bolster our expertise,” Koch says. “We evaluated a number of different opportunities and one company kept rising to the top each and every time and that was FirstService.”
ADT will establish an operating group that will leverage the complex security systems integration expertise of FirstService. The group will be led by FirstService CEO Frank Brewer, who will report to Koch. Brewer founded SST in 1995 and was responsible for all security operations under both FirstService Corp. security brands.
“Commercial sales represent the largest component of our business and FirstService Security strengthens our presence and provides growth opportunities in key vertical markets such as banking and energy,” Koch says.
While merging FirstService’s operations will create some office space redundancy, Koch says he doesn’t anticipate staff reeducations will be necessary. Instead, ADT will look to consolidate real estate properties when leases expire.
The boards of both companies have approved the deal. The transaction is expected to close once it receives regulatory approval.