GE to Buy Interlogix in $777 Million Deal

NEW YORK

December 31, 2001 SSI Staff

Manufacturing giant General Electric (GE) will purchase Interlogix Inc. in a deal valued at $777 million. The transaction will combine equal portions of cash and stock, with Interlogix stock valued at $38.86 per share. Given Interlogix’s closing price on Dec. 17 of $28.71, that represents a 35-percent premium to stockholders.

Security Sales & Integration spoke with Interlogix CEO Brian McCarthy, who says, “Interlogix is a good fit with GE’s industrial group. I don’t believe it changes the dynamics of our industry other than creating another large player.”When asked about public perception, McCarthy says, “People are bound to speculate, but I believe any changes GE might make to Interlogix or its companies would have been changes we would have done anyway. I don’t see anything radical going on within our organization. The focus is still going to be how to best serve customers on a global basis. There will be lots of rumors, such as gobbling up monitoring stations, but I don’t see that happening. I believe we will still continue to provide the industry with products and services to grow and meet customers’ changing needs.”

GE Industrial Systems’ President and CEO Lloyd Trotter says, “Interlogix is a strong global company that will provide us with leading-edge technology in the security arena. In addition, these products will complement many of the industrial components already manufactured by our business.”

Security Sales & Integration also spoke to Joe Freeman, industry analyst and president of J.P. Freeman Laboratories, LLC, who says, “We’re looking at something similar to ADT. They are starting to get into the home automation field. They are applying the gigantic power of GE to an industry with enormous growth potential.”

In its most recent earnings report, Interlogix—a manufacturer of life/safety products that includes the brands Caddx, ESL, ITI, Sentrol and Kalatel—indicated it has approximately 20 million shares outstanding on the market. The deal should be final in the first quarter of 2002.

McCarthy adds, “This industry needs to develop and market new technologies of scale that will really break it open. It’s a natural evolution to a growing marketplace. Companies like GE bring strong credibility to everyone affiliated with the security industry.”

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