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ADT set to boost job count

Rochester Business Journal
September 21, 2012

ADT Security Services Inc., which employs nearly 900 people in Henrietta, plans to add 100 jobs here after separating from Tyco International Ltd. at the end of the month.
 
The location at 285 Thruway Park Drive, one of ADT’s eight monitoring centers in North America, is home to 650 employees.
 
“Those centers process millions of alarm signals every day and are really the heartbeat of the services we provide to our customers,” said Naren Gursahaney, president of Tyco Security Solutions.
 
Gursahaney will become CEO of the new, publicly traded ADT Corp. on Sept. 28.
 
Two of the eight centers will be shuttered after the security services business separates from Tyco, with 100 of those workers coming to Henrietta over the next 12 months, said Michael Fallat, center director for ADT in Henrietta.
 
ADT’s national dispatch center, at 265 Thruway Park Drive, employs 200 people. The support center schedules installations, reschedules service calls and routes service technicians to emergencies.
 
“The scheduling of installations, as well as the dispatch of our service techs, are all coordinated out of that location,” Gursahaney said.
 
Thirty more employees are at ADT’s local sales and service office at 535 Summit Point Drive.
 
“To have the company recognize this community here in Rochester—the quality of the people, the marketplace—and to have us increase our jobs in this type of economy, we’re very proud of that,” Fallat said. “There’s a lot of excitement here.”
 
On Monday, Tyco shareholders approved the spinoffs of wholly owned subsidiaries ADT and Tyco Flow Control International Ltd.
 
Shares of the new ADT Corp. will be distributed next Friday, Gursa-haney said. Each Tyco shareholder will be entitled to receive 0.5 share of ADT common stock for each share of Tyco common stock held.
 
The new company’s stock is expected to trade on the New York Stock Exchange under the symbol ADT.
 
“Come Monday morning, Oct. 1, we’ll actually be trading as a stand-alone public company,” he said in a telephone interview with the Rochester Business Journal. “That’s the beginning of a new era for ADT.”
 
ADT serves nearly 6.5 million residential and small-business customers in the United States and Canada, Gursahaney said.
 
“We should be north of $3 billion in revenue,” he said. “About 90 percent of that is recurring revenue, primarily the monitoring and service fees we charge our customers every month for the services we provide.”
 
ADT employs more than 16,000 people at 200 offices nationally, including 4,000 sales reps and 3,800 installation and service technicians, Gursahaney said.
 
“The service teams also support our indirect channel,” he said. “We’ve got a pretty extensive dealer channel, about 450 authorized ADT dealers who are exclusive to ADT in the securities space. Some of them might provide some other home-based services, like satellite TV, but in the securities space they are exclusive to us.”
 
ADT has been in Henrietta since 1991, starting with 40 employees, said Fallat, an Auburn native who has been with ADT in the Rochester market since 1985.
 
The monitoring center’s 650 workers handle customer service calls and call emergency personnel such as police, fire departments and paramedics when security systems have been activated, he said.
 
Four of the six remaining centers are in the United States, with two in Canada.
 
“In the United States, we are virtual, which means any of the four centers can handle the first alarm signal or the first call,” Fallat said. “One minute we’re talking to somebody from Texas, the next time Alaska and the next time New York.”
 
ADT was started in 1874 as American District Telegraph with the affiliation of 57 telegraph delivery companies. It expanded into fire and burglar alarms in 1910, and became a public company in the 1960s.
 
Tyco purchased ADT in 1997 in a reverse merger of the public company by the privately held Bermuda-based company. The acquisition increased ADT’s client base to 6.4 million from 1.5 million, Fallat said.
 
In this week’s announcement of shareholder approval for the separation of ADT and Tyco Flow Control, Tyco also lowered third-quarter revenue expectations for ADT.
 
The company expects to record a charge of $40 million to $60 million because some of its receivables from security contracts in China may not be collectible. Consequently, revenue guidance has been decreased by $25 million.
 
Tyco previously expected revenue from fire and security services to be $2.75 billion.
 
“We’re kind of planning and building for the future at this stage,” Gursahaney said of ADT going public. “We think we have a great business model that is attractive to shareholders but also attractive to our customers.”
 
“We have the strongest brand in the industry,” he added. “We think we have some exciting opportunities to continue to grow this business as we move forward as a stand-alone company.”
 
Tyco stock has jumped roughly 28 percent since the spinoff was announced on Sept. 19, 2011.
 
“The biggest difference is we will be a pure-play security provider,” Gursahaney said. “The ADT business model within Tyco won’t change, but that will be the entire business model for our new company. Hopefully, it’ll be easier for investors to understand our company and how we create value.
 
“Then, from a leadership perspective, we have everybody deep into the details of the business, understanding how we create value and, probably of equal importance, understanding how we fulfill our mission of creating customers for life.”
 
Gursahaney declined to speculate on long-term growth in the Rochester market.
 
“I expect we will continue to grow across all of our operations,” he said. “We don’t put specific targets for each of our locations. A lot of that will be dependent on how the business performs overall.
 
“But our plans are to continue to grow, and as we grow, since it is a service business that requires people, we’ll be hiring more people.”

9/21/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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