Michael Barnes

SSI Hall Of Fame: 2005

Why He’s On the List:

  • One of industry’s best-known and respected financial analysts and advisors
  • Helped articulate and quantify operating dynamics by which alarm companies create value, setting the pace for profitable business models and demonstrating industry’s value to investment community
  • Involved in many of industry’s highest profile transactions, most recently: GTCR Golder Rauner LLC acquiring Honeywell Security Monitoring; Tyco selling NACC to IASG; and Greater Alarm’s sale to Interface Security
  • Advised GTCR on its acquisition of SecurityLink from SBC in 2001; advised $1 billion sale of that operation months later to ADT in one of the most successful investments in industry history

Something People Might Not Know: Almost became an astronomer.

Most Memorable Moment: “In the early 1980s, Barnes Associates was hired to sell an alarm company that had been built up using a particularly innovative strategy. The owner had college students drive around Los Angeles looking for old rusted ADT bell boxes. The company’s pitch was: ‘We will replace your old leased ADT system with a new state-of-the-art system, no installation fee and lower monthly lease payments.’ Apparently ADT did not update its systems as it does today. This alarm company amassed a customer base totaling hundreds of thousands of dollars in RMR. We worked very hard marketing the company and sold it for an extremely attractive value … to ADT!”

How Things Have Changed: “Number 1, the increase in the industry’s overall sophistication. Number 2, the beginnings of a slow but inexorable shift to the use of video as the dominant ‘sensing’ technology for alarm systems.”

What the Future Holds: “I see the industry continuing its robust growth. Those who fear market penetration levels are getting high do not realize there are still many unprotected households and businesses, and the upgrade market is huge. The structure of the industry will remain relatively the same, with cycles of quasi-consolidation among the larger players. The small, sophisticated alarm company will continue to compete effectively.”

Reaction to Being Inducted: “I am sincerely honored to be inducted into SSI’s Hall of Fame. While I still believe the real heroes of the industry are those who build high-quality alarm companies and those who design and manufacture the required equipment and technologies, I recognize that those of us who help the market work efficiently and effectively also play a vital role.”

Career Highlights:

  • Entered banking industry following college
  • Joined surety bonding division of large insurance brokerage, where he became familiar with the security alarm industry
  • In early 1985, was asked to join St. Louis-based Potter Electric Signal Co. to facilitate sale of fire products
  • Established Barnes Associates Inc. in 1986 to provide alarm companies assistance in acquisitions, divestitures, capital raising and measuring business success
  • Since then, the firm has completed 230+ transactions valued at more than $5 billion

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