Protection One Reviews ‘Strategic Alternatives’


On the heels of ADT’s announcement this week it was buying Broadview Security, Protection One stunned the alarm industry today by declaring it is looking for ways to “maximize shareholder value,” including the possible sale of the company.

The company said in a release it has hired J.P. Morgan to advise its board of directors on the process.

Protection One President and CEO Richard Ginsburg tells SSI there are three primary reasons for the company to consider strategic alternatives. The first is the current strength in market capital, followed by the company’s strong performance over the past year in light of the recession. Protection One also firmed up its balance sheet and extended most of its debt maturities, including a debt of more than $15 million in 2009. The company is now in a position to consider a sale of the company without any pressure, Ginsburg says.

“We just think it’s much better timing now than it ever has been in the past year or two,” he says.

Ginsburg expects there to be a decision on the future of the company in the next three to six months.

“We’re going to see what is out there and if there are any indications of interest. We’ll go back to our board and evaluate those [interests] and hopefully promptly decide on one,” he says. “We also may do nothing as well. Again, we don’t have pressures to do anything except to see if there is any way to get as much value as we can for our shareholders now.”

Protection One underwent a similar process in 2004 when it sold its majority shares to private equity firm Quadrangle Group LLC from Westar Energy Corp. for $120 million.

“The company is in a very good position now and it’s a good time to see what’s out there. It says a lot about what we accomplished in this business,” Ginsburg says.

Publically traded on NASDAQ (PONE), Protection One has about 600 full-time workers.

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