Honeywell Sells Monitoring Business for $315.5 Million

MORRIS TOWNSHIP, N.J.

May 02, 2004 SSI Staff

A private investment firm that once had co-ownership of
SecurityLink before selling it to Tyco is the new owner of
Honeywell’s security monitoring business. Honeywell Int’l
has sold Honeywell Security Monitoring to Chicago-based
GTCR Golder Rauner LLC for $315.5 million.

The deal, announced May 3, is subject to regulatory
approval and is expected to be completed by next month.
While the business will become an independent entity, it
will retain the Honeywell name for the time being as it
transitions under new ownership. Honeywell Security
Monitoring provides burglary and fire protection, access
control, video surveillance, and monitoring and has more
than 800 employees working at 45 branch locations.

Don’t expect downsizing of Honeywell Monitoring which
includes the ProtectionNet Monitoring Center, under GTCR.
Collin Roche, a senior principal of GTCR, told Security
Sales & Integration that the monitoring company’s new
owner has its eyes on expansion. “Our plan is to build on
the current business. We think this business is a fantastic
company. We’re going to grow the business,” Roche
says. “Management’s done a great job but in the context of
being in a larger company, they haven’t had the freedom to
grow.”

GTCR, founded in 1980 and based in Chicago’s Sears Tower
(see July
2003 SSI article on Sears Tower security
installation here), is no stranger to the
electronic security industry. With industry leader James
Covert, GTCR formed Cambridge Protection Industries LLC and
purchased SecurityLink from Ameritech in January 2001.
Seven months later, Covert and GTCR sold Cambridge to Tyco
for $1 billion in one of the largest-ever industry
transactions. Covert is not involved in the Honeywell
transaction.

“We love the industry from an investment perspective and we
were looking to make another investment in the industry.
This is a very valuable service whether it is for
commercial or residential installations,” Roche
says. “Providing security is providing peace of mind. We’re
big believers in the growth of the industry.”

Honeywell announced in
April its intentions to sell the St. Paul, Minn.-based
monitoring business. “This sale is consistent with our
strategy to focus on higher-growth security products and
high-end integrated solutions,” says the president and CEO
of Honeywell’s Automation and Control Solutions segment,
Roger Fradin. “This business has been a noncore asset and
it will be more valuable in the hands of an owner committed
to its growth. We sought, and found, a buyer that
recognizes the value of this business and wants to invest
in its growth.”

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