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Intercon sold to ADT

FirstService Corp., which operates under the Intercon Security brand in Canada, Monday said it has agreed to sell its security division to ADT for US$187 million.



April 14, 2008
By Neil Sutton

The deal has been approved by the board members of both companies and is awaiting regulatory approval.

Frank Brewer, president and CEO of FirstService says the acquisition
was a necessary step for the company to realize its growth potential.
In a video that was released to FirstService staff and customers,
Brewer says the industry “has not been able to deliver high level
security integration on a grand scale.”

In an interview with SP&T News, Brewer said, “There’s a void in that
portion of the market. Customers are looking for a high level of
systems integration, whether it be for IP products or complex products,
but they’re looking for it on a large scale. It’s great if you’re a
good integrator and you can deliver it in Philadelphia, as an example,
but they need it in Philadelphia and Chicago and Tallahassee and five
other places. You’ve got to be able to deliver everywhere. In my view,
no one’s able to deliver in a way that the market’s looking for.”

By merging into ADT, FirstService would be able to capitalize on the
larger company’s resources, he says, like marketing, HR and IT
functions.

The video went on to reassure staff that there were no immediate
workforce changes planned for FirstService. “Our mission will remain on
track. You made us what we are today, and you will help take us to the
next level,” he says.

The company plans to maintain existing management “with some slight
modifications.” Brewer confirmed to SP&T that he will stay on to
manage the division after it has moved into ADT.

Over the next 18 months, there will be some changes, says Brewer. Some
of ADT’s product names will probably change to reflect the acquisition
and FirstService could lose some of its own brands. Canadians are
familiar with the Intercon brand, and the company operates under the
name Security Services & Technologies in the U.S.

“Some of the names could disappear to avoid complexity. It’s hard to
maintain . . . three different brands, as we are currently. From a
marketing perspective, you need some more stability in your name. It
will be a distinct entity within ADT,” he says.

Some recent wins for Intercon in Canada include an IP-based security
network for 1,156 Royal Bank of Canada branches and CCTV surveillance
for Canada Line, Vancouver’s new rapid transit system.

At press time, a spokesperson from ADT was unavailable for comment.

Security analyst Steve Hunt of Hunt Business Intelligence says that ADT
will have to keep a close eye on its customer relationships as it
integrates corporate acquisitions. He compared the company to Home
Depot buying up local hardware stores: the intent is the same but the
scale often goes beyond customer expectations.

“The more muscle that they get from acquiring companies like First
Service, the more they’ll need to pay attention to customer service,”
he says.