Whall Positioned to Build Protection One’s Future
Jim Covert‘s and Tim Whall‘s track record of taking over the reins of struggling national electronic security systems providers has become the stuff of industry legend. First, there was the acquisition of SecurityLink (a company Covert had founded and sold to Ameritech in 1994) in 2001 and subsequent $1 billion sale (included parent company Cambridge Protection Industries LLC) to Tyco later that same year, and then there was the purchase of Honeywell Security Monitoring (HSM) in 2004 (when Covert’s and Whall’s noncompetes ran out) for $315.5 million and eventual sale to Stanley three years later for $545 million (Whall stayed on for a year, stepping down as COO in 2008).
Well the clock had been ticking and once again Whall and possibly Covert (not yet officially revealed) have once again entered the fray with yesterday’s announcement that “an affiliate” of private equity firm GTCR has offered $392 million for Protection One, also assuming $436 million of debt. GTCR was also involved in Covert’s SecurityLink and HSM acquisitions. Is Covert associated with this “affiliate”? We might gain a clearer picture when the official offer (which Pro One has already said it will accept) is made May 3. What has been confirmed is Whall will be taking over for Richard Ginsburg as CEO. Ginsburg was instrumental in resurrecting Protection One from the brink of bankruptcy oblivion and a tarnished reputation during the early years of this century. His effort contributed to him being named to SSI‘s Industry Hall of Fame in 2008. While both Whall and Ginsburg are consummate professionals, my take on Whall is he has more intensity and carries more of a take-no-prisoners attitude.
There are many other interesting wrinkles to this story as well. Among them: Whall is a former executive vice president of operations for ADT Security Services; Whall helped turn SecurityLink into an operation (along with other Cambridge holdings) ADT was willing to shell out $1 billion for; and the sale of Cambridge to ADT included National Alarm Computer Center (NACC), which later became part of Criticom Monitoring Services (CMS) before being taken over by current owner Protection One (although the company likes to keep this somewhat hush-hush). Talk about six degrees of separation.
This is shaping up to be quite a year in the national security services arena, with the top three providers all involved in major transactions (Tyco acquiring and merging No. 2 Broadview, formerly Brink’s Home Security, into market leader ADT accounting for the other two) during the first half of 2010. Just when it looked like ADT was going to ride off into the sunset as the uncontested dominant nationwide security systems and monitoring provider, particularly in the residential market, here comes a rejuvenated Protection One with deep pockets and superior leadership. I for one would never bet against Whall. This guy lives and breathes the business of security, but is just as driven to serve the customer as he is the bottom line.
This situation is going to be fascinating, exciting and fun to watch unfold and play out. Is the purchase price a bargain, too steep or just right? How long will Whall (and perhaps Covert) stay in the game this time? Will we see another meteoric rise and sell-off (perhaps seeing these assets eventually wind up with Tyco, Stanley, UTC, etc.) or are the principals in it for the long haul? HSM Protection Services was acquisitively aggressive; will we now see that with Pro One? Should ADT and Stanley Convergent Security Solutions (where current Stanley CSS North America President Tony Byerly who had been a long-time close colleague of Whall’s now becomes a rival) be concerned about Pro One stepping up its commercial business? What will the impact be for other national, regional and local security services providers? What about the investing community and end users?
The answers to these questions are anybody’s guess, but all will be made known in the coming months. Until then you can also read what several of the industry’s leading analysts have to say here.
As always, thanks for reading …
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