Brink's Home Security to go away by 2012

RICHMOND, Va.--Brink's Home Security is going to have to find a new name by 2012.

Industry watchers were taken by surprise by the news, included in a lengthy May

30 SEC filing, that Brink's Home Security has been paying royalties (7 percent of revenue--roughly $33 million in 2007) to sister company Brink's, Inc., to use the Brink's Home Security name and will lose that privilege three years after the two companies are spun off into independent firms by The Brink's Company at the end of this year.

"Brink's Home Security is the mass marketing brand name of choice for the residential user; the Brink's Home Security name is golden," said industry analyst Jeff Kessler. "It's going to be a challenge to come up with another brand name [like Brink's]."

The branding news was greeted with enthusiasm by Brink's competitors. Russ Cersosimo, CEO of super regional Guardian Protection, called it "great news." He said Brink's is "the best run national company out there. I've admired Brink's and their numbers for years." Cersosimo said he's "not afraid to compete with them, but the challenge is competing with that name: Brink's is synonymous with security ... We welcome the break-up."

Did the hedge funds who were pushing for the spin-off, such as Pirate Capital and MMI Investments, know that the brand name would be going away? Or did they not care, figuring they'd be off to greener pastures by 2012? Thomas Hudson of Pirate was precluded from commenting because he sits on The Brink's Company board of directors. Clay Lifflander of MMI did not return calls from Security Systems News seeking comment.

Asked this question, Ed Cunningham, spokesman for The Brink's Company said, "As we went through the process, branding was always raised as an area of importance to both units."

Kessler, who's been following the company for years, said he'd never seen those royalty numbers spelled out in a filing before. He noted that The Pittston Company, which then owned Brink's, Inc., launched Brink's Home Security in 1983 and BHS did not become "profitable or revenue neutral for the first eight years." He surmised the royalty may have been a sort of payback to the Brink's, Inc.

Kessler also noted that The Brink's Company has a five-year non-compete agreement with BHS. At that time, The Brink's Company could launch another physical security company, although Kessler said he believes Michael Dan (CEO of The Brink's Company) would be more likely to enter the commercial industrial space, rather than the residential, light commercial business that BHS is in right now.

Asked if The Brink's Company intends to launch a new physical security company once the non-compete expires, Cunningham said, "All I can really tell you is that it won't happen before five years."

There's also a good chance, Kessler said, that Brink's Home Security may be acquired by another company within the next three years, which would render the branding question moot.

The rebranding issue will be a challenge, but BHS is in good shape and has steady-state cash flow--a metric Kessler considers important in determining the profitability of a security company's recurring base of business--"that's higher than any one I know of in the public market." He also said the "top notch executive team" at BHS, notably CEO Bob Allen and CFO Steve Yevich, mean the company "is in good hands."

Reply to
noauth
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call it:

1 BINKY 2 BANKS 3 SCUM SUCKERS 4 5 2 DOORS AND A MOTION. 6 YOU'LL NEVER OWN IT.
Reply to
Kid

I've never seen Brinks install 2 doors and a motion unless it was Tom Fowler's install :)

Reply to
mleuck

I guess that depends where you live. I have never seen a full perimeter Brinks install here in Tampa. The majority of the houses here are prewired for alarm by third party, Brinks comes in and slaps their crap on the wall. Panel is loaded with wires that go to all the windows, but never get tied in to the system. typical LED keypad, no motion, 3 doors at best.

Pathetic installation practices. You should see their hole-in-the-wall Clearwater office. It makes my office look big...

Jim Rojas

Reply to
Jim Rojas

I've always been partial to;

Fawlty Alarm or Phalse Security

Reply to
Crash Gordon

Their TV commercials says it all...they use scare tactics to get new suckers, and they threaten your credit rating to make sure they get paid. Nice, real nice.

Jim Rojas

Reply to
Jim Rojas

Around here it's prewire and full perimeter installs, usually 2 keypads

Reply to
mleuck

From what I have seen this is their game:

The home is already prewired, so they do their $99 lick and stick install. Sure, for an extra $1000+, they will connect the rest of the doors & windows, plus give you a smoke and a motion, etc.

The problem most people have with companies like Brinks, is that the monthly rate never seems to go down, it always goes up. It is only when you threaten to cancel your account, that's when the so called lower cost deals magically appear. By that time, the customer finally figures out that they have been duped all along, and shop elsewhere. That's where companies like Nextalarm, safemart, Alarm Relay, etc. get their takeover accounts from.

Jim Rojas

Reply to
Jim Rojas

RHC: Yeah, we have far too many "contract monkeys" in this industry in both countries. Brinks is just one; ADT is another, although they generally put in at least a reasonable system (albeit, always at far too much money, both up front and ongoing).

The real bottom of the barrel though is Alarmforce with their mickey mouse, non supervised wireless and "two way voice". You guys probably haven't seen them in your area yet; however, their plan is to sell about 38 franchises in the USA. People who buy into their heavily promoted nonsense are either totally stupid at worst, or gullible at best. But what's really scary is that they are so very successful. Users are totally sold on their systems and think they are the greatest alarm systems in the world.....?????? In my books, they are just short of a scam !!

As the years pass in this business, I honestly don't think that things are getting any better. Finally, CANASA up here put out a public release warning people of the dangers of door to door alarm system sales, but I doubt this will do much good overall. People are just too lazy to properly inform themselves about security before buying. They are conditioned in life to "instant gratification" in everything and simply won't take the time to learn to avoid these disastrous companies. So they get preyed upon....

It just boggles my mind !!!!!!!!!!!

Reply to
tourman

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