ADT has entered into a definitive agreement to acquire Boca Raton, FL-based Red Hawk Fire & Security for $317.5 million in cash. The transaction accelerates ADT's growth in the commercial security market and expands the Company's product portfolio with the introduction of commercial fire safety-related solutions.
According to a press release, "It is the latest in a series of strategic acquisitions made over the last year to drive commercial growth and build on ADT's strong foundation of superior customer service. With the addition of Red Hawk, ADT will have an increased geographic footprint and enhanced customer service capabilities across the nation. Revenues from the combined company's business customers are expected to represent approximately 25% of total revenue."
The release continues: Red Hawk is a leader in the design, installation, integration, monitoring and servicing of commercial fire, security and life safety solutions. Red Hawk represents one of the few last independent large national commercial integrators, offering complex, mission-critical solutions across its 45 district locations and is expected to generate approximately $300 million of revenues in 2018. In recent years, Red Hawk has demonstrated double-digit revenue growth across a diverse set of customers, markets and geographies, leveraging its strong local presence backed by its nationwide footprint and differentiated fire and security expertise.
In recent years, Red Hawk has posted double-digit revenue growth across a diverse set of customers, markets and geographies. In SD&I’s annual Fast50 ranking of the fastest-growing security integrators, Red Hawk ranked No. 24 in 2018, No. 45 in 2017 and No. 43 in 2016 (learn more about the Fast50, which opens for entries in late December, at www.securityinfowatch.com/sdifast50).
“Commercial security is one of the core pillars of ADT’s growth strategy and today’s announcement marks a significant step in our concerted efforts to expand our commercial business,” said ADT President and incoming CEO Jim DeVries. “Red Hawk’s portfolio of commercial fire and security solutions complements ADT’s existing commercial business, positioning us to provide a superior customer experience at a local and national level.”
Said Red Hawk President and CEO Michael McWilliams: “We are delighted to join with ADT’s resources, growth potential and shared commitment to providing high quality customer service and innovative solutions.”
Since Aug. 2017, ADT has acquired seven commercial integration companies, including Aronson Security Group (ASG), Access Systems Integration (ASI), ACME Security Systems, Protec Inc., MSE Corporate Security and Gaston Security. In fact, the company recently announced the launch of advanced enterprise security risk management services (ESRM) and a 24/7 help desk for end-user and technician support.
The ESRM is driven by ADT’s Enterprise Security Risk Group (eSRG), which independently assesses a client’s risk and works them to develop a value-based security program, create a technology roadmap and provide managed services to help augment the customer’s internal staff.
The combined commercial business will have substantially increased scale with an expanded commercial technician work force that will allow the company to meet growing customer demand across the U.S. and provide enhanced customer service capabilities, the release states. This transaction creates the opportunity to leverage the capabilities of both organizations to create a more robust and differentiated commercial security offering in a highly fragmented industry.
Additionally, the acquisition expands ADT's product portfolio with the introduction of Red Hawk's fire safety solutions, enabling ADT to become a single destination for both fire and security needs at the commercial level. The company intends to leverage Red Hawk's fire safety solutions and expertise to help capture new business opportunities with new and existing customers.
The completion of the transaction is subject to customary closing conditions, including regulatory approvals and is expected to close by the end of the fourth quarter 2018.