IMS Research: Alarm Monitoring Market Will Retain Its Independence Despite Tyco/Broadview Security Deal

  • Jan 22, 2010

Following the recent announcement by Tyco International that it intends to acquire Broadview Security, there has been considerable discussion on what this means for the industry and whether other mergers and acquisitions will follow.

One topic of particular interest has been the share of the alarm monitoring market that Tyco International, and its security business ADT, will have following this acquisition.

In response, IMS Research stated that ADT and Broadview will have a combined share of around 50 percent of the residential alarm monitoring market. This analysis measured revenue generated by companies owning and operating a central station and did not include revenues generated by alarm installers that use wholesale central stations to monitor their own accounts. That being said, how will this acquisition affect the customer?

From the customers’ point of view, the residential alarm monitoring market will remain fairly fragmented despite this acquisition. There are thousands of independent alarm dealers in North America using third party central stations to monitor their customers.

When these independent dealers are included in the analysis, ADT and Broadview Security account for only around 30 percent of the residential alarm monitoring market. Their market share is further reduced if the commercial alarm monitoring market is also considered.

"Despite the economic situation, the U.S. alarm monitoring market has continued to perform reasonably well with low single digit growth in 2009,” said Niall Jenkins, research analyst at IMS Research. “The market offers long term growth potential and we expect more acquisitions to follow in the coming years.”  

In related news, it has been reported that Protection One is exploring its strategic alternatives, including a potential sale of the company. While the potential for further consolidation remains, the high number of independent dealers active in the alarm monitoring market will make it difficult for mergers and acquisitions to consolidate the market significantly.

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