TrendSKRM Interactive acquires Sector 10 Services

Orlando, Florida-based SKRM Interactive is acquiring Seattle, Washington-based Sector 10 Services USA. There are other mergers and acquisitons in the space, so why should we take note of this particular one? We do because Christian Tedrow, an analyst with SKRM Interactive, offers a lucid and persuasive explanation for his company’s move, and embeds his explanation in deeper trends which charcaterize the market. It is worthwhile to listen to what he is saying.

Tedfrow says that America’s war on terrorism has created a historic opportunity in the homeland security market. Companies that can deliver valuable services to our government and military stand a great chance of securing lucrative contracts. He continues: “With the war on terrorism not ending anytime soon and threats to America building each day, now is the time for investors to look into the homeland security market with fresh eyes.” Tedrow explains that this view of the market led his company to acquire Sector 10 Services USA. Sector 10 is a provider of predeployed emergency life response and escape equipment for high-rise buildings and city emergency needs. The market for Sector 10’s systems appears promising: There are more than six million buildings in the United States, of which 943,000 are over seven stories and 400,000 are

skyscrapers. The company estimates the value of this market at up to $104

billion.

Tedrow goes on to say that “So far, the battlefields of [the war on terrorism] have remained in the Middle East and not in our streets. The problem is that there is a strong chance terrorist cells are ready and waiting inside the United States. That is the market mission for our pending acquisition of Sector 10 Services USA, Inc.” The homeland security market is looking for businesses that have medical products or systems that can help quickly deal with the aftermath of an attack. New York-based Ionatron is working with the Defense Department to help deal with the IED threat by utilizing direct energy and lasers. DRS Technologies is working with the Defense Advanced Research Projects Agency (DARPA) to develop near-mid wavelength infrared active detection receiver to help identify IEDs. The Washington, D.C.-basedHomeland Security Research Corp (HSRC) — and also DHS high-ups, in a May 2007 NDIA event — predict that improvised explosive devices (IEDs) and other terrorist style attacks are likely to hit U.S. streets in the near future. It is not a matter of if but a matter of when. Tedrow adds: “When the HSRC says that the United States and Western Europe are ‘catastrophically underprepared’ to deal with the threat of IEDs and other small scale attacks, it is wise to listen.”

Preventing an attack is one thing; dealing with the aftermath of an attack is another. Dead and wounded people, damaged roads, destroyed buildings, traffic congestion, disrupted communication — these are but some of the problems terrorist attacks create. Companies which offer solutions to these and related problems will prosper (see our discussion from last Wednesday about Rockville, Maryland-based TeleContinuity). Tedrow concluded:

In order to help win this war and move our country forward, innovative and forward-looking businesses like Sector 10 are needed. The demands placed upon our country, requires capitalist vision to produce the services and products required to help us deal with the realities of war. The homeland security market is burgeoning which means opportunity. Our pending acquisition of Sector 10 means opportunity for our shareholders. Companies and businesses that are poised to grasp this opportunity will both help the country and increase profits. We believe that SKRM Interactive and Sector 10 will be one of the rising stars.