GE TO BUY INTERLOGIX IN $777 MILLION DEAL
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, valuing Interlogix stock at $38.86 per share. Given Interlogix’s closing price on Monday of $28.71, that represents a 35-percent premium to stockholders. Security Sales 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.” Additionally, he says, “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.” He goes on to say, “In addition, these products will complement many of the industrial components already manufactured by our business.”
Security Sales 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.”
“I believe it is an endorsement and an expression of confidence on the part of one of the world’s largest companies on the viability and strength of the security industry,” adds Jack Mallon of Mallon and Associates, an investment bank and publisher of Mallon’s Security Investing Newsletter.
“They are confident this industry will be in the forefront of growth in the next decade.”
In its most recent earnings report, Interlogix indicated it has approximately 20 million shares outstanding on the market. The deal should be final in the first quarter of 2002. The purchase, made by GE’s industrial systems division, is the second large purchase by a GE division in as many days. On Monday, GE’s power systems announced it purchased some operations and assets from Honeywell Int’l Inc. Interlogix is a manufacturer of life/safety products and includes the brands Caddx, ESL, ITI, Sentrol and Kalatel.
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