Earlier this month, United Central Control, Inc. (UCC) announced that it had acquired just over 20,000 wholesale monitored accounts from Red Hawk Monitoring, LLC, a wholly owned subsidiary of security systems integrator Red Hawk Fire & Security. The deal, which will also add 149 new alarm dealers to UCC’s portfolio, was characterized as a win-win by executives from both companies as it will enable Red Hawk to focus more on its core business while also helping UCC increase its footprint within the company’s home state of Texas and in the Houston area specifically.
“Our primary reason for moving this piece of our business out was so we could focus heavily on our long-term growth plan just to concentrate on our own commercial customers,” said Efrain Saenz, Red Hawk’s central monitoring station general manager. “This being a wholesale, third-party monitoring part of our business is very different from our deliberate plan to really focus on Red Hawk commercial customers.”
“From UCC’s perspective, there were a few drivers. One is we love the Houston market, we’re heavily concentrated in the Houston market and we knew a lot of the business was in the greater Houston area and certainly in Texas,” said UCC Senior Vice President Mark Matlock. “It fit our portfolio very well and there are four employees here that came from Counterforce USA, which is now Red Hawk, and we had existing relationships with a lot of these dealers already through folks that had left their company so it made a lot of sense for us from that perspective – it was in our footprint, we knew a lot of these customers and it was just a good fit for us.”
According to Saenz, theses monitoring accounts were a part of the business when UTC sold Red Hawk to a private equity firm in 2012. Saenz reaffirmed that the divestment of these accounts simply marks a shift in the company’s focus to use their CSAA Five Diamond-certified monitoring center for their own accounts and not those of other alarm companies.
On the other hand, Matlock said that UCC is “100 percent” focused on wholesale monitoring and that this transaction is going to help them build a nice referral base.
“We have a little bit different perspective in the dealer relationship, so we want to turn these people into a big referral base. Being a wholesale central station and only focusing on wholesale, we’ve built a great portfolio of services to offer these dealers,” added Matlock. “We feel like we can help them generate more recurring revenue which will help us generate more recurring revenue. We’re really going to drive to help these customers succeed and, in turn, we will succeed with them. It just folds in really well to existing portfolios of business that we have in these regions.”
Ron Bowden, director of dealer development for UCC, said that the deal will also likely pave the way for more acquisitions by the company in the future.
“All in all, it was a good fit for initial growth as well as growth opportunities going forward,” said Bowden, adding that they expect to have all of these accounts transitioned over to UCC within 90 to 120 days. “The wholesale monitoring business is our only business so we work in this space every day. We’ve developed a lot of additional services for our customer base to help them manage their business – everything from sales and marketing, attrition, alarm activity, as well as opportunities for additional financing avenues that they may want to look at. You put all of that together, we’re going to take a good customer base that Red Hawk had created and hopefully make it a better customer base as we go forward.”