NEW YORK — After a detour in the audio/video market, Steve Roth has returned to his original love as part of a group that has acquired Tri-Ed Distribution from Tyco. After a long career in the electric security business, Roth left the industry behind after leaving ADEMCO/Honeywell in early 2001. Roth and private equity firm Wheatley Partners announced Jan. 31 that they acquired the business unit from Tyco for an undisclosed sum, with Roth to serve as Tri-Ed’s new CEO.
The sale is the latest part of a cost-cutting plan by Tyco — the parent of ADT — to divest some of its companies, including the April 2004 sale of security integrator Sonitrol to a group of investors.
After leaving Honeywell, Roth became CEO of audio/video distributor Terk Technologies and seemingly ended all involvement in the security industry. He got a small taste of it again when Security Sales & Integration contacted Roth in late 2003 to tell him he had been selected to the inaugural class of 25 for the SSI Hall of Fame, which was presented in the February 2004 issue.
(To see this year’s new inductees into the SSI Hall of Fame, click here.) Tyco’s eagerness to sell Tri-Ed was brought to Roth’s attention and his group started its acquisition bid in May. “I never anticipated being back in the business but sometimes, opportunities make themselves available that you just can’t overlook,” Roth says. “It just seemed like the right people at the right time for the right price.”
With 26 branches in the United States and Canada, Tri-Ed distributes low-voltage security equipment including alarm panels, CCTV cameras, access equipment, smoke detectors, speakers and structured cabling. Tri-Ed, which will retain its name, was a subsidiary of Digital Security Controls (DSC) before Tyco acquired it and DSC in late 2001. As an independent entity, Tri-Ed plans to embark on a substantial expansion strategy.
“We are probably west of the Mississippi-centric,” Roth says. “We have virtually no representation in the Midwest; these are obvious holes in our footprint and they’re going to have to be addressed.”
Few would debate Roth’s credentials, as he is credited for helping build ADI from a 10-branch distributor to the 120-plus-office powerhouse it is now.
However, Roth says the industry has seen substantial changes since he left — including the aftereffects from 9/11 — and he is not about to get by on his past experience.
“We don’t come in with the attitude that we are all knowing and this is going to be a slam dunk. It’s an industry we’re comfortable with and we’re familiar with, and we look forward to trying to catch up,” Roth says, speaking for the company as a whole. “There’s probably some very subtle but real changes that have taken place and we want to make sure we’re in tune with them.”
Tri-Ed’s planned growth doesn’t mean Roth has any plans to take on his former employer. Roth says he is proud of what ADI is now and you’ll never hear him “knock it.”
“This is a huge industry. The opportunity is vast and we are looking to be a strong No. 2 player,” Roth says. “We have no thoughts about taking any particular company on. That’s not our objective. Our objective is to, very simply, provide that value proposition and win over the business one customer at a time.”
Roth expects to acquire new customers who may have balked at Tri-Ed in the past, thinking that it would show a bias toward Tyco products. There will be a short-term increase of product offerings at Tri-Ed, as well as more services.
“The channel conflict goes away,” Roth says. “Existing customers will purchase more and new customers will see an opportunity to participate with us and see what it is to participate with a truly independent distributor that is focused on the customer.”
