[Article courtesy Daily Herald, Paddock Publications, Inc.]
May 20, 2005
Honeywell Security Monitoring growing rapidly following spin-off
By Nushin Huq
Daily Herald Staff Writer
Though Honeywell Security Monitoring headquarters has been in the Chicago area for less than a year, it’s definitely not the new kid on the block.
In June 2004, Honeywell International Inc. sold its 35-year-old security monitoring division to a private equity firm, GTCR Golder Rauner LLC for $315.5 million cash.
Since becoming a stand-alone company, the Lisle-based firm has acquired 12,000 customers and earned $1 million per month in new sales, according to Tim Whall, the company’s president and chief operating officer. Revenues for the nine months it’s been a stand-alone company are $125.5 million, up from $118.7 million for the previous nine months.
“Our philosophy is unparalleled customer service,” said Whall.
Honeywell Security Monitoring offers four products: burglary protection, fire protection, closed circuit television and access control. It also offers 20 services such as its eDataManager and asset tracking.
Among its 125,000 customers are Office Depot Inc., Kohl’s Corp., Barnes & Noble Inc. and the Cheesecake Factory Inc.
Though Whall is concentrating on increasing commercial customers, it plans to eventually reach out into the high-end residential market. Currently, 77 percent of its clients are commercial and the remaining are residential.
“By high-end we mean the level of security installed, not the price of the house,” Whall said.
According to Whall, companies will hire multiple agencies and have them provide different services.
“A company might hire us for closed circuit television and another company for access control.”
Steve Meyer, an independent security consultant and chief executive officer of S. Meyer & Associates Inc. in Glendale, Ariz., said Honeywell’s longevity in the field was an asset.
“There are a lot of new companies coming into the security business,” he said. “Honeywell has been around for a long time and I’ve never heard anything to discredit it. That’s important in this business.”
He added that it’s common for a company to hire more than one security company because each company has its own strengths.
Lauric Friedenfelds, vice-president of consulting for Chicago-based Sako & Associates Inc., a security and consulting company, said Honeywell monitoring was known for its high level UL listed central monitoring service.
“Honeywell is one of the top, if not the top,” he said.
According to Whall, closed circuit television has been receiving the most attention from customers.
“With this product, customers can monitor a single location or multiple locations from their laptop,” he said
Another service available electronically is called eDataManager (eDM), a data management system that provides HSM’s customers online, real-time access to their facilities’ security data. The Cheesecake Factory finds this service invaluable.
“Every morning I get a report outlining the monitoring of each store,” said Chuck Collins, senior manager of assets protection for the Cheesecake Factory in Calabasas Hills, Calif. “It lets me know which stores have turned on their security systems at night and which ones turned it off during the day. If a store doesn’t turn it on, I can contact the store immediately, find out what happened and make sure it doesn’t happen again.”
He added that general managers have access to the security system in the stores. He can add and delete who has access to his account online without having to download a form and send it in.
“It really streamlines the process,” Collins said.
By September, HSM plans to add two more electronically accessible services. Customers will be able to access billing information and track installation.
“That way if a store is opening in June,” Whall explained, “a customer can log onto his account, and see the expected date of the completion of our work and what we’ve done so far, such as install wiring.”
HSM’s business plan calls for controlled growth, Whall said.
“We currently have about 49 facilities in 32 states and about 900 employees,” Whall said. “Over the next year we plan to add one sales representative to each of our offices.”
This will double the company’s sales-force.
“We want to be the preferred security company,” Whall said.