Longtime Winnipeg security company ProTELEC Security and Safety Ltd. has exited the residential monitoring business so that it can double down on the commercial side.
Family-owned ProTELEC has sold its residential book of business totalling about 12,000 homes, mostly in Winnipeg and Manitoba, to Toronto-based A.P.I. Alarm Inc.
Harry Black, the current president of ProTELEC, a business that was started by his father Robert in 1968, said a decision was made almost two years ago that the residential side of the business had become so big that they did not feel the company was able to maintain the level of customer care they thought was necessary.
"We did a lot of searching for the right company to do this kind of transaction with and we believe A.P.I. is the right one," Black said.
"Our residential business was just getting too big to manage. But A.P.I. has that equation solved."
Both he and Josh Garr, a director of A.P. I. (which is also family-owned), referred to the relationship between the two companies as a partnership.
"We have always done a lot with ProTELEC and we will continue to do so," Garr said.
ProTELEC’s home monitoring is now switched to A.P.I.’s system. "The transition has already happened," Garr said. "No one will notice anything — from monitoring, to monthly invoicing, to the customer service they need — all will remain exactly the same."
The only difference, Garr figures, is that A.P.I will be able to offer some home-monitoring services ProTELEC might not have had available.
Although it has been in the residential security business since the 1980s, when the home panel first became available, there is so much technology Black said ProTELEC was not prepared to keep up with. The company will instead become exclusively a commercial security business as it was when it began in 1968.
"All the smartphone technology... either you get in 100 per cent or you get out," Black said.
"We decided the time was right for us go back to our roots and make a really good business of that."
But the Blacks and ProTELEC are not going away. In fact, although terms of the deal were not disclosed, one condition is that A.P.I not hire away any of ProTELEC’s 100 employees.
Even though the company is selling off a major piece of its business, Black said the plan is to not lay anyone off, but to redouble attention on the commercial security and monitoring business, as well as a lone worker safety service that it offers to clients across North America through an app called CheckMate.
"There are so many fewer competitors in the commercial side," Black said. "It is much more profitable, it is much harder for competitors to get into and there are so many more product lines."
ProTELEC is one of the larger acquisitions A.P.I. has made since it got into the business in the 1980s. It has grown to more than 400,000 subscribers across the country with a little bit of business in the U.S. A.P.I. already has about 22,000 customers in Winnipeg and an office with around 15 employees, which will have to grow to service the additional 12,000 customers it now has.
A.P.I. has already been competing across the country in the home-monitoring business with the telecom companies and he believes with a 25 per cent penetration, there is still plenty of room to grow.
"Home security never achieved the same penetration as cellphones or home phones, but it’s growing," Garr said. "We can offer more and more interactive services like smart home control of lights, thermostat, locks and more, and so it is growing."
Rial Black, who has been doing lots of work in the commercial side for a long time, said ProTELEC’s commercial customers have a greater need for security and the firm believes it can grow that business with a company-wide focus with a greater need for services like environmental monitoring for server rooms and power monitoring for mission-critical situations.
As well, the company has been successful in breaking into the cannabis market, which requires levels of security greater than most other business.
"Cannabis has created a whole new division for us," Rial Black said.
"From a cost-per-square-footage perspective, I don’t think there is an industry more protected or which spends more on security. There is camera and access on every door, as well as full perimeter protection, camera fence alarms... there is quite the security requirement."
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.