Notes from the Editor: Lean And Mean

March 4, 2019
With industry consolidation continuing, we can only hope that developing new products remains a priority

Take a look at any key blank catalog and you will find dozens of real peoples’ name such as Yale, Corbin, Junkunc and Schlage. These are people who had as much or more of an interest in building great lock products as they had in making a profit. There are still some entrepreneurs in the security world like Adam Weinraub (Pro-Lok), and Gene Degre (KSP) who still operate the companies they or their families founded.

A second level of individuals is those who are dedicated to the security industry but may have purchased existing lock companies. Aaron Fish is the best example. He purchased several lock companies such as Dominion, Ilco, Silca and Taylor to form Ilco Unican. His personal drive put these companies back on the road to success.

A third type of business group is investors. These people may not have any specific interest in the lock industry. Their experience is in purchasing companies in any business sector whom they view as a possible candidate for increasing profit and business value. After a few years, and after having raised the value of that business, the investor group sells out and moves on to another project.

This all was brought to mind today when an announcement arrived explaining that OpenGate Capital LLC had agreed to purchase Sargent & Greenleaf. According to one report, OpenGate Capital specializes in investing in various companies including "technology, media and telecom sectors, building products, chemicals, industrials, business services and consumer sector... It typically holds its investments for three to seven years and exits through private sales."

Competition promotes new inventions. As more and more companies consolidate or become controlled by investors instead of by people who live and breathe hardware ideas, we can only hope that the importance of new products will not be supplanted by the push to meet better bottom line profits. It has been my experience that the first thing some investor groups do is to make the purchased company mean and lean while eliminating the spark which first made the company what it once was. Locksmiths can only wait and see what the outcome will be.