Earlier this spring, UTC announced that it had sold its fire and security systems integration operations, known primarily as Red Hawk, to the Comvest Group, a Florida-based private equity firm.
According to Red Hawk CEO Mike Snyder, the company, which has about 1,400 employees and 40 offices across the U.S., was born out of a series of nine acquisitions by UTC beginning in 2004. Following UTC’s acquisition of GE’s security manufacturing business in 2011, Snyder said that Red Hawk really was no longer a "strategic fit" for the company and they decided it would be best to get out of the service business.
"That was a much more strategic fit for their business than kind of greenfielding a services business," said Snyder. "United Technologies is a world-class manufacturer and much more comfortable with the manufacturing model and once they had the opportunity to acquire the GE business, they made the decision that the services business was really off strategy for them. They made that decision because the services businesses then caused some channel conflict back with the manufacturing business they now owned, so they made the decision to divest."
While being divested from a brand as well-known as UTC may appear on the surface to be a hindrance, Snyder said that the new Comvest ownership group is committed to helping the company grow. Though it’s their first acquisition in the fire and security realm, Snyder said that Comvest has been in business for 20 years and has a long history of acquiring technology, manufacturing and services businesses.
"As an owner, they are certainly comfortable with the type of business and they became very, very comfortable with the (security) space pretty quickly," he explained. "This is a private equity firm that really went out its way to understand the business and provide the right capital structure for the business to allow Red Hawk to start to grow again, have a great sponsor to invest in programs and in products. In the future, (there will be) acquisitions to really grow and start to capture a share of this security market, which is obviously very attractive to a lot of sponsors these days."
He added that Comvest and its investors will also be behind the company for the long haul.
"They are not looking for quick returns. They’re investors, which means Comvest in itself are kind of long haul guys," Snyder said. "It’s a company that has a track record of investing back into the companies that it acquires to grow them and build them."
In addition to Snyder, a former president of ADT, the business, which will operate under the name of Red Hawk Fire and Security U.S., will also be led by former GE Security and SimplexGrinnell President Dean Seavers. Snyder said that Red Hawk has also recruited other industry veterans to come and work for the company including; Ardy Azhir, former CEO of API; Alex Chermak, former VP of commercial marketing at ADT; and Mark Foley, a former controller for Tyco International.
Snyder ranked Red Hawk as a top 10 systems integrator, placing the company just inside or outside the top five in what he characterized as a "vibrant" market.
"As technology gets introduced into this industry, it becomes part of enterprise solutions for companies, not just niche security application solutions," he said. "I think, additionally, there has been a real suppression of spending over the last several years because of the economy, so you’ve got replacement, renovation and upgrades of technology systems and applications that just haven’t been made, so you’ve kind of got this pent up demand. As it relates to that, we’re going to be guys that know the technology, understand it and have a great reach. Red Hawk had a great reputation for service and we want to distinguish ourselves that way. We are one of the few integrators in this business that can do fire and security design, layout, application, construction, installation and post service including such managed services such as emergency backup and monitoring."
