March 1, 2010, Hartford, Conn. -- Industrial firm United Technologies Corp. announced this morning that it has closed on its purchase of GE Security from General Electric. The two companies had announced the agreement in November 2009, and the deal is said to be worth $1.82 billion.
"This strategic acquisition enhances the scale, market reach and product offerings of our existing UTC Fire & Security business," UTC Chairman & Chief Executive Officer Louis Chenevert said in a prepared statement. "It demonstrates our disciplined approach to acquisitions and capital redeployment that focuses on delivering shareholder value."
GE Security's business included technologies for commercial and residential security, including video surveillance, home and commercial alarm systems, electronic access control and security management systems, and fire detection products. The unit was formerly part of GE Home & Business Solutions. The GE Security division moves into UTC Fire & Security, which UTC says serves more than 1 million customers.
In a written statement issued to SecurityInfoWatch.com, UTC said it has no immediate plans to end-of-life GE Security systems or to leave current GE Security dealers without the products they are trained on and know how to sell. The company said it also would put a plan in place such that when products reach end-of-life, the systems would be able to be migrated over to on-going product families.
“UTC Fire & Security believes that the combination of UTCFS and GE Security is very complementary. Specifically, we see tremendous value in GE Security’s product portfolio, channel and customer relationships, and new product initiatives. Post close, it is UTC Fire & Security’s desire and intent to extend and enhance the investments customers have made in GE Security products and systems. GE Security’s partners, dealers and distributors should know that it is our intention to continue to invest in a full line of products and systems that suit their needs now and in the future. If and when products reach the end of their natural lifecycle, our goal is to have a seamless transition to ensure customers have good choices as they upgrade and enhance their existing systems.”
In a letter from UTCFS President William Brown posted at www.1utcfs.com, he notes that UTC has licensed the GE trademark for three years and for up to 10 years on select products, and he notes strong branding among select GE units (specifically mentioned: EST, Vigilant, Aritech, Ziton, Kilsen, FireworX, TruVision, Casi Rusco and Supra) that he intends to "preserve."
In that same letter to partners and customers, Brown also looks to settle the concerns of GE dealers who may be concerned of competition with UTCFS' own service business (Red Hawk is the UTCFS service arm). Brown writes: "We already operate in an environment where independent channel partners sell and distribute the majority of our product volume. We have operated successfully with this model by ensuring that our channel partners share the same advantages as our UTCFS-owned service businesses. We think this healthy and appropriate for the new organization as well."
Brown also presented a video address to GE partners echoing many of the same comments.
Much of the speculation has surrounded GE's access control/security management systems, which are seen to compete with UTC Fire & Security's Lenel division (which was acquired by UTC in 2005).