Stanley Security Buys SentryNet; Will Launch New Dealer Program
Stanley Security says it will continue to operate the wholesale monitoring provider independently as it launches new marketing initiatives and other programs to help dealers grow.
PENSACOLA Fla. – There is a common refrain in the security industry that suggests, “Every business is for sale.” For David Avritt, who recently closed a deal with Stanley Security to sell SentryNet, a wholesale monitoring firm he established in 1987, that axiom came true sooner than he expected.
The two companies completed the transaction July 31, according to Avritt, but have remained quiet about the deal until now in order to give Stanley Security ample time to present its new offerings to SentryNet dealers.
Although terms were not disclosed, Stanley Security acquired alarm monitoring services for about 650 independent alarm dealers. Stanley also took ownership of SentryNet’s monitoring center in Pensacola, Fla., where the company is headquartered, and its main central station in Memphis, Tenn.
“First of all, it is SentryNet as usual. The same people are here. Nobody is going anywhere. We are doing the same thing, but what we are looking for is to help [independent dealers] grow. To get to the next level you have to have resources. That is what we did, Stanley will bring an enormous amount of resources to the table,” Avritt tells SSI.
Although SentryNet provides a full slate of monitoring services to its dealer clientele, the company has never offered a formal dealer program that might include such value-add services as marketing support, product discounts, financing programs, and much more. Last year, Avritt concluded it was high time for SentryNet to launch a full-throttled dealer program, and to do it right would take a lot of capital.
He turned to ProFinance Associates, a San Diego-based broker-dealer firm, for consultation on the organizational house-cleaning and other financial report preparations necessary before seeking bank lending. Ultimately, his advisors told him the game plan would be to put SentryNet up for sale.
“I said I really don’t want to go up for sale, I’m just looking for money here,” Avritt explains.
The advisors told Avritt the only way to determine the true worth of SentryNet is to find out what somebody was willing to pay for it. Putting a for sale sign on the company would also help Avritt learn exactly which banks were most likely to provide capital and how much they would be willing to lend. He agreed and SentryNet went on the market.
“In April  we did the cut off. We had some pretty good offers, as well as we had several banks that were willing to offer us money. We had a number of companies – computer companies, software companies – that were looking to partner with us on things,” Avritt says. “Some of the companies were from outside the industry. I was pleasantly surprised.”
Stanley Security first entered the picture at the beginning of the year. A mutual contact at ProFinance Associates connected Avritt with principals from Stanley Security who had expressed interest in expanding their own portfolio of dealer programs. In May, talks between the two companies began in earnest and would continue over the next three months.
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“If Stanley was looking at doing a dealer program, first off, I know they can do it bigger and probably better than I could. So that’s where I came to the conclusion. It was just a good opportunity,” Avritt said. “They are pursuing the projects that I wanted to do. We want to become a life-cycle company – helping an alarm company from its infancy, through its middle years, all the way to when they want to exit the business.”
SentryNet’s dealer base, according to Avritt, ranges from mom ‘n’ pop shops to medium-sized companies with upward of 4,000 accounts. The account base includes a mix of residential and commercial customers. Stanley Security has contacted each SentryNet dealer to emphasize its plans to run the company “business as usual” and detail future dealer program offerings.
“We have full intent of keeping both central stations running under the SentryNet brand. We are not going to merge it into Stanley. We are going to let it operate independently,” Julie Beach, vice president of sales & marketing, software and controls, Stanley Security, tells SSI.
Stanley is not new to the independent dealer model. The company’s mechanical business sells to independent dealers, as does its automatic door business and electronics business.
“Through the other areas of our business, we’ve learned what independent dealers need, want and are looking for. We already have many marketing programs for other parts of our business. We are going to piggyback off some of that,” Beach explains. “We will leverage collateral that already exists so it can be personalized for those [alarm] dealers to take out in the field.”
Through its integration division, Stanley Security will also look to leverage its buying power from mutual suppliers and distributors to offer product discounts to SentryNet dealers. The company also plans to package and offer products that it manufacturers to SentryNet dealers as well.
“We are going to actively keep trying to bring in new dealers and help our existing dealer base grow to bring more monitoring services into the SentryNet monitoring centers,” Beach says.
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