ADT on Tuesday announced that it has entered into an agreement to sell its Canadian business operations, ADT Security Services Canada Inc. (ADT Canada), to Vancouver-based telecommunications firm Telus Corporation for CAD 700 million ($527 Million).
The sell will comprise all of ADT Canada’s operations and assets. During the last fiscal year, which ended on Dec. 31, 2018, ADT Canada generated revenue of $229 million.
In a statement, ADT President and CEO Jim DeVries said the sale of the “more capital intensive” Canadian operations would allow the company to enhance its focus on growth and “higher margin opportunities” in the U.S.
“Opportunities continue to develop for ADT in the areas of smart home integration, the expansion of the home security business into new demographics and ADT’s growth in commercial security,” DeVries said. “Importantly, these emerging opportunities are ideal for leveraging the trusted ADT brand as we continue generating strong free cash flow to drive shareholder value over the long term.”
ADT has invested heavily in the commercial security integration space in recent years, acquiring a number of well-known firms including Red Hawk Fire & Security, Aronson Security Group and Protec Inc. among others.
The acquisition will significantly expand the presence of Telus in the residential and commercial security markets in Canada as it will add approximately 500,000 customers and 1,000 employees to its rolls. According to a statement, the company recently added 12,000 security customers, bringing its total to nearly 100,000 prior to the acquisition.
An Analyst’s Take
Unlike many cable and telcos that entered the market several years back and expected to offer security as a simple bundled upgrade and soon realized that the industry was more labor-intensive than they anticipated, Anna Sliwon-Stewart, research analyst for security and building technologies at IHS Markit, says the acquisition of ADT Canada Telus shows that the company is serious about providing quality security services to both home and business owners.
“Telus by acquiring a specialist company such as ADT will be able to fully control the operations behind its security business, and monitor quality of offered services,” she explains. “Professional monitoring is the essence of customer assurance. By leaving the security operations to professionals, Telus will ensure high quality of services and will avoid the burden of offering 24/7 technical support or dealing with numerous false alarms which, in the security industry, is estimated at around 95%-98% of all alarms received by monitoring stations.”
The acquisition will also give Telus the ability to deliver the level of service that commercial customers expect, according to Sliwon-Stewart.
“Currently, telecommunications providers have a small role to play in the commercial security as business customers usually require more customized systems and more robust video surveillance solutions than home security customers,” she adds. “This requires specialist skills and customer support that can help solve any issues quickly, without disruption to the business’ daily activities. Telus will be able to do so much more effectively now that it gained access to Canadian ADT’s expertise and skills.”
Joel Griffin is the Editor of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].
