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36 RESIDENTIAL SYSTEMS www.securitysystemsnews.com APRIL 2011 SECURITY SYSTEMS NEWS CSG: New equity and plans Company enhancing dealer program, adding technologies By Tess Nacelewicz TULSA, Okla.—In late 2010, Central Security Group got a new owner: a private equity group. Now, this year, CSG is taking that infusion of new capital and putting it to work to grow the company—by adding new technology and creating a new brand for its dealer program. “We are so excited about what is going on with us,” said Glenn Albers, who recently moved from VP, customer operations to VP, dealer operations as part of CSG’s strategy to focus more on its dealer program. CSG, which is based here and does business in most of the Sunbelt states stretching from California to Florida, is one of the nation’s top full-service providers of security alarm moni- toring services. Albers declined to disclose how much new capital CSG has available, but said it’s going to be put to work enhancing the company’s re-branded “Fair & Square” dealer program and adding new technology the company is rolling out along with the dealer program later this month— Alarm.com, 2GIG, UTC/GE Security, Honeywell Total Connect, and two-way voice. That will lead to rapid growth, Albers predicted to Security Systems News in an interview Feb. 10. “I think once people hear about us, it’s really going to take off,” he said. Summit Partners, a Boston- based equity investor, announced its acquisition of CSG on Nov. 1 from Great Hill, another private equity firm in Boston. Terms have not been revealed. “We are so excited about what is going on with us.” —Glenn Albers, CSG However, Albers said, Summit “paid a premium price (because) Central Security has always been looked at as, if not the top company in what we do, one of the premier companies.” He said CSG, which was founded in 1999 and has RMR of more than $3.5 million, is 95 percent residential. “We’ve grown the business from 8,000 (accounts) 10 years CSG see page 40 Vector now in Hudson Valley By Martha Entwistle PITTSBURGH—Vector Security has moved into the Hudson Valley area of New York for the first time with the acquisi- tion of Poughkeepsie, N.Y.-based Hammond Security. “We like the employ- ees, the customers, and the market,” Vector president and CEO Pamela Petrow told Security Systems News. “We do business in Massachusetts, Northern New Jersey, Eastern New York, but we don’t do the boroughs,” Petrow Pam Petrow explained. “This acquisition in Poughkeepsie links us to accounts that are further north.” Terms of the deal, announced Feb. 8,were not released. Founded by Mac Hammond in 1968, Hammond is a full-service busi- ness with a 60 resi/40 commercial split. The company has 5,000 accounts, and close to 40 employees. “We’re keeping all of the employees and the [former Hammond office] location will become a new location for Vector,” Petrow said. Mac Hammond will stay on in a sales role. His daughter, Kim Sears, will be general manager for Vector’s Poughkeepsie office. Petrow said Hammond was known for a high quality of ser- vice and had a “tremendous false alarm reduction program.” While Vector has a “fairly robust false alarm reduction program,” she said Hammond will be able to share some best practices. The last time Vector did a major acquisition was when it moved into Florida with the acquisition of Certified Security Systems. SSN Get smart meter smarts By Tess Nacelewicz VIENNA, Va.—Utility compa- nies are installing smart meters on homes and businesses around the nation to help the utilities and their customers better manage power usage. But the devices appear to have some drawbacks—one of them being possible interfer- ence with property owners’ security alarm system. That concerns the Central Station Alarm Association, which published an arti- cle late last year in the CSAA Dispatch, a publication of the association, which is based here. The article cites news reports saying that after smart meters were installed, some property owners experienced problems with their other electronics, including security alarms. “We wanted to bring that to the attention of the industry so they could start doing something proactive about addressing it,” Prendergast said the extent of the problem isn’t yet known. The installation of smart meters is so new, he said, “it’s still in the very early stages.” Still, he suggests the indus- try be proactive and educate customers. He said homeowners may not be aware of the issue. “Many may go a long time without realizing that it’s the smart meter that’s causing the interference, especially in the case of an alarm system John Prendergast, an attorney who handles FCC and legislative issues for the CSAA and who helped author the article, told Security Systems News in March. because of course in a sense the only time you’re going to find out is if your alarm doesn’t go through,” Prendergast said. METERS see page 39 ADT goes to the movies By Tess Nacelewicz BOCA RATON, Fla.—A new thriller movie that was set for release on DVD/Blu-ray in March features ADT Security Services alongside the film’s star, Academy Award winner Hilary Swank. “It’s a kind of different tactic for us—going Hollywood,” Bob Tucker, ADT director of public relations, told Security Systems News. “This is the first time in recent memory that ADT has had a product placement on a major motion picture.” The film, which had not been released prior to SSN’s dead- line, is called “The Resident.” According to a press release from Image Entertainment, it’s about a young doctor, played by Swank, who begins a new For a more robust version of stories in this section, see: WWW.SECURITYSYSTEMSNEWS.COM n life in Brooklyn after separat- ing from her husband. “Her stunning and spacious loft seems too good to be true, and when mysterious occur- rences lead her to believe she’s not alone, she discovers the unthinkable ... someone is watching her,” the release says. Enter, stage left, ADT. In a trailer for the film running on TV and the Internet, the charac- ter played by Swank can be seen turning to an ADT interactive services solution for protec- tion. The name of the company appears on a computer screen as an actor playing an installer sits in front of the screen explain- ing to Swank how the security systems works. When he spoke to SSN in March, Tucker was still wait- ing to get a chance see the rest of the film, which he said was slated to go straight to DVD instead of opening in theaters. But he said he’s heard that there are other references to ADT, which is based here, in the film. “We did this as a cool way to promote our new technology and believe the partnership with the studio was mutually beneficial,” Tucker said. SSN BRIEFS Alarm Capital to launch dealer program MEDIA, Pa.—Alarm Capital Alliance, based here and celebrating 10 years in the alarm account acquisitions busi- ness plans to launch a new indepen- dent dealer program at ISC West in Las Vegas, April 6-8. Amy Kothari, ACA’s president and CEO, said the program is being launched at the request of dealers. “Our program is very competitive,” Kothari said in a statement. “We offer aggressive multi- ples, flexible purchase options, special- ized equipment pricing with the lead- ing manufacturers and encourage the dealers to keep as many of their own accounts as possible. As it is in our bulk acquisitions, the unique element of our program is allowing dealers to use their decals and yard signs and truly market their business in their own name. We even have their name on invoices to the subscriber. Our goal is to help indepen- dent business owners realize their own success.” McGinn, Smith: Beach house sale ordered ALBANY, N.Y.—A federal judge earlier this years ordered the sale of a Florida beach house to preserve assets in the case of Timothy McGinn and David L. Smith, two security alarm indus- try investors based here that the SEC has charged with defrauding investors of more than $80 million in a Ponzi scheme. On Feb. 1, a judge ruled that a vacation home in Vero Beach, Fla. that Smith and his wife bought 10 years ago be sold to help benefit investors. The monthly mortgage of $6,188 on the home, worth an estimated $1.7 mil- lion to $1.9 million, hasn’t been paid since last April, when the SEC filed charges against McGinn and Smith and their assets were frozen, according to the judge’s order. The two were principals of McGinn, Smith & Co., an Albany-based invest- ment firm that conducted investment dealings in the alarm industry. The SEC contends that from 2003 to 2009, the pair diverted funds into financially trou- bled entities and into their own pock- ets, and to pay for exotic dancers on McGinn’s You Only Live Once cruise ship business. Other expenses for the Smith home at Orchid Point Way have gone unpaid and upkeep hasn’t taken place, accord- ing to Magistrate Judge David Homer in U.S. District Court in the Northern District of New York. The judge wrote he was concerned that the value of the property could diminish and ordered the sale of the property “to halt the diminishment of its value and to realize the greatest pos- sible return.” The judge also extended the date of the trial of McGinn and Smith from this year to March 15, 2012.