Bell’s $166M AlarmForce acquisition small but strategic buy: analysts

BCE Inc. is making a bigger play for the home-security arena with the $166 million acquisition of security company AlarmForce Industries Inc. "Leveraging Bell's network and service leadership and our place in millions of Canadian homes, we look forward to growing our nascent position in security and automation services to ensure Bell residential customers are at the leading edge of connected home innovation," Bell CEO George Cope said in an a press release Monday. AlarmForce currently has more than 100,000 subscribers and offers products like fire, flood and burglar alarms, medical alert systems and automated systems for lights, locks and climate control, the release noted. RBC Capital Markets analyst Drew McReynolds said in a research note Monday that AlarmForce is the second-largest home security company in the country. He added that while the acquisition isn’t financially material, it “highlights the growing battle among telecom operators to own the home as well as the desire to tactically and actively participate in over-the-top services (such as home security and home automation).” Bell said that the acquisition of an established home security company would allow it to “quickly expand into the connected home sector in Ontario and Québec.” The company has some home security offerings in Atlantic Canada and Manitoba due to its acquisitions of Bell Aliant and MTS, it noted. “Alongside new service bundling and technology development opportunities, Bell expects to achieve significant synergies in network connectivity, distribution, installation and customer service operations from the integration of AlarmForce with its existing residential services business,” the release added. McReynolds said that in addition to complementing its existing home-security offerings, the acquisition will enable Bell to better compete with similar services that will be available through the X1 platform from Comcast Corp., which cable rivals Rogers Communications Inc. and Quebecor Inc. are in the process of adopting. It’s also another service that will allow Bell to differentiate itself from what’s offered by smaller internet service providers (ISPs) that buy wholesale access from larger companies. In a note, Barclays Capital analyst Phillip Huang said the move was a “small acquisition that serves big purposes,” citing the same reasons as McReynolds, including “cross-selling opportunities” between the two companies.

Bell’s $166M AlarmForce acquisition small but strategic buy: analysts

Brief | November 7, 2017

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Bell’s $166M AlarmForce acquisition small but strategic buy: analysts

Brief | November 7, 2017

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