SD&I 2017 Fast50 No. 2: Succession by Merger

Imagine a room filled with the owners of the 10 largest ADT dealers in the country. Then imagine if six of them decided to join forces and merge together into a single, cohesive company. Welcome to the reality of SafeStreets USA, which, thanks to both organic growth and mergers over the years, stands as the second-fastest growing security service provider in SD&I’s Fast50.

“The group of us have known each other for quite some time,” explains Kevin Gaylord, the CEO of the combined SafeStreets USA. “At one time we were all independent companies, but all the owners knew each other and started working together. One by one, each kept joining the conglomerate. Those are the roots of the SafeStreets story.”

The road to those six companies merging – Eversafe Security Systems, First Detection Systems, AlarmTeam, Absolute Security, ASC Security USA and Gaylord Security – began in 2008, when Todd Herman, Mike Robson and Barry Simmons took Eversafe, First Detection and AlarmTeam and merged to form SafeStreets USA. In 2012, Curtiss Weinstein brought Absolute into the mix; and the unification became complete in January 2016, when Gaylord Security and Mark Sessa’s ASC Security joined the combined operation.

Today, SafeStreets USA stands tall as the largest ADT authorized dealer, and the company recently completed a leadership transition. Herman, Robson and Simmons announced their retirement in December 2016, and Gaylord (CEO), Weinstein (President) and Sessa (Chief Business Development Officer) have taken the reins of the company, with the original trio forming their advisory committee.

“The new executive leadership provides everything the previous ownership group could possibly hope for when it comes to turning over the business we spent twenty plus years building,” Simmons said in a statement. “They have great chemistry amongst themselves built on a mutual respect for their individual accomplishments. The company is truly in good hands and poised for continued growth and success.”

“Our business relationship with SafeStreets USA has spanned more than 20 years, and we could not be prouder of their illustrious achievements as an Authorized Dealer,” added Jim DeVries, ADT’s Chief Operations Officer. “While we celebrate the past, we are also excited to welcome the new leadership group of SafeStreets with whom we have the utmost confidence will take SafeStreets to even greater accomplishments.”

Inside the Transition

The new SafeStreets leadership group group spent all of 2016 smoothing out the edges to create a cohesive company that spans almost the entire country; in fact, the acquisitions expanded SafeStreets USA’s footprint to cover 90 percent of the United States – with operations in 44 states and the District of Columbia.

“It was a pretty challenging undertaking, taking what was already a large company in SafeStreets and adding Gaylord and ASC into the mix,” Gaylord says. “There were a lot of moving parts.”

One thing that eased the transition was the simple fact that all companies involved were already well-established ADT dealers; thus, each sales and installation team is accustomed to working with the same technologies and systems. Plus, Gaylord, Weinstein and Sessa are established industry veterans – Gaylord launched his company back in 1995; Weinstein’s Absolute Security dated back to 1999; and Sessa’s ASC became an authorized ADT dealer back in 1998.  

“Most people when they look at mergers and acquisitions, think they look in terms of gaining footprint or account base,” Gaylord says. “For me, it was more about talent acquisition. Bringing these strong regional companies together, the biggest benefit to us is simply bringing together all that talent. We were able to mold together all of the strengths from every single one of these companies – so we spent a lot of last year really identifying who is the strongest at what and where everybody’s wheelhouse is so we could put them in the right place where they all can succeed.”

The sheer number of employees at SafeStreets has nearly doubled since the 2016 merger, but because the relationships of each of the six leaders of the company date back more than 20 years in some cases, the transition did not create the sort of “clash of company cultures” that others may experience.

“The good thing about knowing these guys for so long is we already know each leader’s philosophy in business and because we get along so well, it was pretty clear that most of our philosophies were very similar,” Gaylord says. “There wasn’t a big shock of someone coming in and making huge changes.”

When he officially began as CEO in March, Gaylord toured many of the company’s satellite offices and held town hall-type meetings where he was able to express to the employees his vision for the company and how he likes to run his business. “I have been able to express that to all the employees over the last couple of months, so it wasn’t a big culture shock,” he says.

Growth Strategies

Now that the major mergers and leadership transition are in the rearview, Gaylord and the leadership team are focused on maintaining SafetStreets USA’s status as a customer-focused security company. SafeStreets, in fact, has one of the lowest attrition rates among ADT dealers, Gaylord says.

“We are trying to grow the company, but we want to make sure we maintain the focus on the customer,” he says. “Attrition and those sort of things on the back end can bite you, so we are very cognizant of that. We want to maintain that focus, but we certainly do want to grow.”

In addition to traditional customer growth, SafeStreets is also focused on expanding its own dealer program – one of the only programs of its size sanctioned by ADT. An independent dealer can become a SafeStreets USA Dealer to take advantage of the company’s well-developed resources, such as operations and fulfillment support. It enables companies to take advantage of becoming an authorized ADT dealer while SafeStreets handles the back-end support.

“A dealer might be really good at sales on the front end – our program lets them focus on that while we take care of the back end things like installation, maintenance, equipment acquisition and handling attrition,” Gaylord explains. “Some owners just don’t find that a strength for them; so this is their opportunity to still have their own company, do their own thing, but let us focus on the back-end. If you are going directly to ADT, you will already have a solid understanding of the back end as well as the sales front end.”

SafeStreets USA’s dealer program also consists of hands-on training in its Garner, N.C., corporate office for topics such as customer retention, call center management, HR, licensing, funding and business management, to name a handful.

ADT in Transition

Many a security dealer has found success being a partner with ADT: “The biggest plus, of course, is the name,” Gaylord says.

However, ADT itself has undergone quite the transformation as of late. Not only did three of its biggest individual dealers merge to create SafeStreets USA in January 2016, ADT itself was acquired by Apollo Global Management – which brought the recently combined Protection 1 and ASG Security to the table – just a month later. The combined security company, operating under the ADT name, created a behemoth security company, which also had to go through its own leadership transition. Tim Whall, President and CEO of Protection 1, became CEO of the combined business.

“We are really encouraged by the focus of the new management at ADT,” Gaylord says. “Tim Whall has come in and his focus is on operational excellence and the customer experience – which again, has always been a focus for us.”

Gaylord adds that Whall has put a large focus on back-end operations and service – things like eliminating caller hold times and expediting service and maintenance of systems.

While the Protection 1/ADT merger has opened up opportunities for ADT on the commercial side, Gaylord says SafeStreets USA will maintain its laser focus on the residential market. “Our focus has been and probably will continue in the near future to be on the residential market.”

Leveraging Residential Trends

The rise of the smart home has paralleled the rise of residential security companies in the Fast50; in fact, 2017 marks the second year in a row with a major home security dealer occupying one of the top two spots (NorthStar Home was the top-ranked company last year).

While Gaylord admits the new technologies and capabilities have given residential security sales a boost, he tends to take a more conservative line when it comes to what is actually driving customer growth. “I think (home automation and smart home technology) is seen as the ‘fun thing’ – it is more entertaining, and certainly from a security company standpoint, that stuff has a little more sizzle to it,” he says. “But security is still pulling that wagon.

“When people come to us, they want home security,” Gaylord continues. “They ask about remote control of their system, we show them the (ADT) Pulse app where you can turn the system off and on, view cameras, and control locks and thermostats. It is all very cool and functional, but again people want security as the basis for everything.”

Gaylord says that one of the advantages of working with ADT is that SafeStreets as a whole can focus more on the sales and back-end services instead of worrying about the latest gadgets coming out of the CES show. “ADT’s got their team busy making decisions as to what equipment fits best with their system and how to roll it out, what it should look like, and how they will interact,” he says. “That is a huge benefit for us.”

Back in June of 2014, SafeStreets USA announced it had brought on its 500,000th ADT customer. Gaylord obviously hopes to continue the success of his predecessors at SafeStreets. “I can’t lay claim to any magical solution other than waking up every day and working as hard as we can,” he says.

Paul Rothman is Editor in Chief of Security Dealer & Integrator (SD&I) magazine. Access the current issue, along with full archives and subscribe link at www.secdealer.com.