;

ADT to Enhance Commercial Business With Red Hawk Fire & Security Acquisition

ADT says revenues from the combined company’s business customers are expected to represent approximately 25% of total revenue.

ADT to Enhance Commercial Business With Red Hawk Fire & Security Acquisition

BOCA RATON, Fla. — ADT (NYSE: ADT) announces it has has entered into a definitive agreement to acquire Boca Raton, Fla.-based Red Hawk Fire & Security, a leader in commercial fire, life safety and security services and portfolio company of Comvest Partners, for $317.5 million in cash.

The transaction accelerates ADT’s growth in the commercial security market and expands the company’s product portfolio with the introduction of commercial fire safety related solutions, according to the company.

This deal follows the purchases of Acme Security Systems and Aronson Security Group earlier this year in an effort to drive commercial growth..

ADT says revenues from the combined company’s business customers are expected to represent approximately 25% of total revenue.

Red Hawk offers mission-critical solutions across its 45 district locations and is expected to generate approximately $300 million of revenues in 2018. In recent years, Red Hawk has demonstrated double-digit revenue growth across a diverse set of customers, markets and geographies, leveraging its strong local presence backed by its nationwide footprint and differentiated fire and security expertise, according to a press release.

“Commercial security is one of the core pillars of ADT’s growth strategy and today’s announcement marks a significant step in our concerted efforts to expand our commercial business with the critical capabilities and services that our customers expect,” says ADT President and incoming CEO, Jim DeVries. “Red Hawk’s exceptional portfolio of commercial fire and security solutions complements ADT’s existing commercial business, positioning us to provide a superior customer experience at a local and national level. We are excited to welcome the talented and experienced Red Hawk team to the ADT family while expanding our geographic reach, service capabilities and product offerings. Having long admired Red Hawk, we are confident that combining the strengths of our two companies will allow us to deliver increased value to our customers and shareholders.”

ADT lists the following as strategic and financial benefits of the transaction:

  • Substantial Increase in Scale to Accelerate ADT’s Commercial Growth: The combined commercial business will have substantially increased scale with an expanded commercial technician work force that will allow the Company to meet growing customer demand across the U.S. and provide enhanced customer service capabilities. This transaction creates the opportunity to leverage the capabilities of both organizations to create a more robust and differentiated commercial security offering in a highly fragmented industry.
  • Introduction of Fire Safety Solutions: This transaction expands ADT’s product portfolio with the introduction of Red Hawk’s fire safety solutions, allowing the Company to become a single destination for both fire and security needs at the commercial level. The Company intends to leverage Red Hawk’s fire safety solutions and expertise to help capture new business opportunities with new and existing customers.
  • Compelling Long-term Financial Benefits: Given the strong financial and operating profile of Red Hawk’s business – which, similar to ADT’s growing commercial and multi-site businesses, has very attractive net customer acquisition cost and retention characteristics – the acquisition is expected to be accretive to free cash flow generation, before taking into account meaningful expected cost benefits.

“We are delighted to join a company with ADT’s resources, growth potential and shared commitment to providing high quality customer service and innovative solutions to customers,” says Red Hawk President and CEO Michael McWilliams. “We look forward to our future with ADT, which we are confident will help us to achieve our next phase of growth.”

The completion of the transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close by the end of the fourth quarter 2018.

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.

A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!


One response to “ADT to Enhance Commercial Business With Red Hawk Fire & Security Acquisition”

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Our Newsletters