Broadview Security to merge with ADT

Tyco executives announced deal to purchase Broadview for $2 billion, merge it with ADT Security Services

"It portends a significant direction for sale of these types of businesses," said Mack. "Companies may no longer be getting 50 or 60 times RMR. These are the best players in the residential alarm business, and this is the benchmark transaction in the industry and will be for a long time."

Mack agreed with Wahrsager's belief that the deal was very good for the industry and shouldn't be seen as a negative for smaller alarm businesses.

"If market wasn’t growing, consolidation would be intimidating for the other companies, but we're seeing growth of sometimes up to 10 percent a year in this industry," said Mack. "I generally think there is opportunity for small- to mid-size companies with respectability in the market. More consolidation at the top may mean more room for independent companies."

Mack said that to make the synergies between ADT and Broadview work, the two companies would likely 1) consolidate some monitoring operations, 2) merge branch offices where the companies overlapped geographically, and 3) make cuts in administrative back-end staff. ADT currently operates five monitoring centers in North America; Broadview Security has two monitoring centers, located in Irving, Texas, and Knoxville, Tenn. Broadview's President Bob Allen said the two companies are not yet at a point where they have fully planned the technical integration of monitoring operations.