Manufacturer 1-on-1: Honeywell Security and Fire President David Paja

March 3, 2016
Paja discusses company’s recent acquisitions in this exclusive SIW Q&A

The security market has seen a significant amount of consolidation over the past several years and if the first two months of 2016 are any indication, this could prove to be a banner year for mergers and acquisitions throughout the industry. One company that has been extremely active when it comes to acquisitions on the hardware side of the business is Honeywell.

Aside from its highly-publicized courtship of rival UTC, which the company has now formally announced it will no longer pursue, Honeywell has made two significant acquisitions within its Security and Fire business in recent weeks. 

In early February, Honeywell announced that it had entered into an agreement to acquire Xtralis, a global provider of aspirating smoke detection along with advanced perimeter security technologies and video analytics software, for $480 million. Xtralis pioneered the development of very early warning technology that can detect smoke in a facility at an early stage of a fire, giving emergency responders additional time to help prevent or minimize physical damage and injury.

Earlier this week, Honeywell announced it has acquired RSI Video Technologies — known under the Videofied brand — a provider of intrusion detection systems for commercial and residential security applications for approximately $123 million.

SecurityInfoWatch.com (SIW) recently caught up with David Paja, president of Honeywell Security and Fire, to discuss how the acquisition of these companies will complement their existing product offerings and what the future holds for their M&A strategy.

SIW: What is the strategy behind your recently announced acquisitions of RSI and Xtralis and how do they boost your product portfolio in their respective product segments?

Paja: Obviously we’re very excited about the announcement of these two acquisitions in the last few weeks. They fit very nicely with our strategy of basically enhancing our offering for connected homes and connected buildings. Our Automation and Controls business inside Honeywell is really focusing on connectivity and how we bring more end-to-end solutions to our customers and channel partners. In that respect, the first thing we did was combine fire and security because we see these two offerings as very complementary in homes and commercial buildings.

RSI clearly complements what we do in our core intrusion business, so we’re able to provide a more advanced solution to our customers. Xtralis brings two pieces; one is leading technology in fire and smoke detection and they also have a very nice security piece that focuses on the industrial space around video monitoring and remote video verification.

SIW: How does the acquisition of RSI help Honeywell make a greater push into the video verification space and what were some of the factors that influenced your decision?

Paja: When you think of video verification, the cost of false alarms is very high so there is an economic driver supporting the growth of this technology and its adoption, but there is also a consumer pull because everyone wants to be aware of what’s going on when an alarm goes off. We see end users looking for more value and more service in terms of being able to visualize what’s going on. We basically see both economic reasons but also consumer expectations driving the adoption of these types of visual solutions.

SIW: How do you plan to integrate both of these companies into Honeywell and are there any existing synergies you can leverage to your advantage?

Paja: We have a pretty structured M&A program in Honeywell. We’ve done quite a few acquisitions over the past few years as a corporation, so we’ve engaged a joint integration team which includes members from the two sides to find a way to make them fit in the Honeywell model. We’re flexible moving forward in terms of finding their strengths, our strengths and how to leverage both. We don’t foresee any difficulty in bringing them onboard at Honeywell, but it’s going to take the next few months to figure out how they fit into the company.

SIW: How will these acquisitions impact your channel partners?

Paja: In Honeywell, we really consider our channel partners a key part of our strength and everything we do keeps dealers and channel partners at the forefront of our strategy. We are always trying to enable them to be more successful to generate more RMR opportunities for them. This should be a benefit in terms of providing more opportunities to our partners to deliver more services and make more RMR from their end customers.

SIW: Will you be looking to make other acquisitions in security where they make sense in the near future?

Paja: Honeywell has stated its intent to leverage M&A as a tool to enhance our portfolio, so if you’ve followed Honeywell as a group over the past few months and the last couple of years, you’ve seen increased focus on M&A as a way to complement our offerings for connected homes, connected buildings and other connected industries. There’s no rush and we are not trying to hit any specific target but we keep looking at strategic fits and opportunities that complement the solutions that we provide to our customers.

About the Author

Joel Griffin | Editor-in-Chief, SecurityInfoWatch.com

Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com, a business-to-business news website published by Endeavor Business Media that covers all aspects of the physical security industry. Joel has covered the security industry since May 2008 when he first joined the site as assistant editor. Prior to SecurityInfoWatch, Joel worked as a staff reporter for two years at the Newton Citizen, a daily newspaper located in the suburban Atlanta city of Covington, Ga.