INDUSTRY ACQUISITIONS
Henry Bros. Agrees to Sell for Approximately $45 Million to Kratos, Subject to Approvals
Henry Bros. Electronics Inc. (HBE), Fair Lawn, N.J., a turnkey provider of technology-based integrated electronic security solutions and ranked as the 18th largest U.S. security integrator on SDM’s Top Systems Integrators Report, entered into a definitive agreement with Kra- tos Defense & Security Solutions, San Diego, Calif., in October. Under the terms of this agreement, Kratos will acquire all outstanding shares of HBE common stock for a purchase price of approxi- mately $45 million in cash, or $7 per HBE share of com- mon stock.
Eric DeMarco, Kratos’ president and chief executive officer (CEO), said, “Henry Brothers is clearly one of the
Insider News& Business 20,000
Kratos Defense & Security Solutions’ headquarters located in San Diego, Calif.
premier homeland and national security solution providers and command-and- control-center design engineering and operators in the industry today. We see the opportunity for significant cross selling between the two businesses.” Ben Goodwin, president of Kratos’ Public Safety & Security Solutions seg- ment, said, “We believe that the com- bination of Kratos and Henry Brothers will allow us to pursue opportunities together that we would not have been able to pursue alone.” He added that Henry Brothers’ strong customer base in the transportation market would be a significant addition to Kratos. Goodwin explained that Kratos has
a strong presence in the Department of Defense. We’ve not taken advantage of the opportunities in the physical secu- rity space within the DOD. [Going for- ward] we have the opportunity to pursue a number of Department of Defense ini- tiatives because the two companies have a combined strength that’s very signifi- cant. Kratos has a large number of offices located at military BRAC installations. There is a lot of new construction going on in that space and we see a lot of opportu- nity. In addition, we expect to be able to sell our proprietary cyber security products, NeuralStar and dopplerVUE into the customer base of Henry Brothers.”
“This is a win-win-win for sharehold-
ers, customers and partners,” said Jim Henry, CEO of HBE, adding that the merger will allow HBE to be stronger a company for its shareholders and cus- tomers by increasing its footprint and resources. It will also improve its value proposition for supplier partners. Henry and Goodwin both pointed out that Kratos and HBE truly complement each other. “The two companies have simi- lar pedigrees in products and supplier rela- tionships, as well as geographic synergies: we are where they’re not and vice versa,” Henry said. “Our common culture and common pedigree creates a lot of good synergy and gives us scale to compete in a HENRY BROS. continued on page 36
Total attendees at last month’s ASIS 2010 56th Annual Seminar and Exhibits in Dallas, a slight increase over 2009.
City of Fontana Settles
With Alarm Group In a settlement ending more than two years of legal wrangling, the city of Fon- tana, Calif., has agreed to pay $173,284 in attorney fees to the Riverside-based Inland Empire Alarm Association, and tweak the Police Department’s burglar alarm response policy. In September 2008, the Council unani- mously approved an ordinance that allowed the city to fine alarm companies $200 for false alarms on non-monitored systems and $150 for each call a company placed to the department for property, intrusion and burglar alarms that were unverified. The ordinance also authorized the department to switch to a verified response system on alarms. That meant police would not respond to burglar alarm notification calls from alarm companies unless there was some audio, video or eyewitness verification that a break-in was about to happen or had occurred. A San Bernardino Superior Court judge
earlier this year found some key provisions of the 2008 ordinance to be unconstitu- tional and affirmed other portions of it. The city and the association reached an agreement they each said is fair and puts an end to costly court battles. Mor- gan Hertel, president of the association, said he was happy with the compromise, in part, because it allows for additional means with which to verify alarms. ■
November 2010 19
PHOTO COURTESY OF KRATOS
PHOTO BY SDM STAFF
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