Less than two years after buying home security company LifeShield from DirecTV, a Center City private equity firm sold the company to industry giant ADT (NYSE: ADT) for about $25 million.
ADT, based in Boca Raton, Fla., announced the deal last week. In a statement, it said the DIY offering will allow the company to tap into a market of consumers who may want a security system but don’t want to deal with the hassle of a professional installation.
The acquisition represents the second time Hawk Capital Partners’ Mike Hagan has sold Langhorne-based LifeShield, which was originally founded in 2004 and now employs about 100 people and counts about 30,000 customers.
Hagan left his position as CEO of Nutrisystem in 2009 to lead LifeShield and held a significant equity stake until 2013, when he sold it to DirecTV and formed Hawk Capital with partner Jim Mirage.
After AT&T acquired DirecTV in 2015, it shifted its focus to its own home security asset and decided to sell LifeShield. Hawk Capital purchased it in May 2017 for undisclosed terms.
““Had it not been for [Hagan’s] involvement in this before, I don’t know that we would’ve acquired it, because there’s a lot of uncertainty … When you can remove a lot of that [uncertainty] … it provided us with a great deal of comfort.”” Mirage told the Business Journal at the time.
Since then, LifeShield named veteran marketing executive John Owens as CEO, who described the company as a “kick startup” and worked to build out the system’s capabilities, including adding automation and voice-control options. Owens will stay on with ADT.
“We are confident that LifeShield’s capabilities and approach, combined with the brand and scale of ADT, will create an opportunity for us to offer our services to a broader cross-section of U.S. households,” ADT CEO Jim Devries said in a statement.
In a report in industry publication Security Sales & Integration, analysts said it’s likely ADT was attracted to LifeShield’s technology and the chance to gain a foothold in the growing DIY installation market.
“I don’t think this is going to be accretive to earnings or increase the company’s residential market share in the near term,” Imperial Capital Analyst Saliq Khan told the publication. “But it does give them a chassis upon which they can build a much more meaningful and competitive DIY platform over a period of time.”
Publication Source: Philadelphia Business Journal