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NASCAR a big deal for IRST: Role as security products provider could be worth $100M

April 24, 2006

Ingersoll Rand Security Technologies has been named NASCAR's first official provider of security products, a deal that could mean substantial growth for the company's Carmel headquarters and an Indianapolis manufacturing plant, which together already employ 900.

IRST is a division of Bermuda-based behemoth Ingersoll-Rand Co., which is better known for agricultural, construction and transportation equipment sold under names such as Bobcat and Thermo King.

The link with the racing circuit is expected to drive home the point that Ingersoll-Rand is now more than a toolmaker. Its locally based security technology division counted for $2.1 billion of the company's $10.6 billion in annual revenue in 2005.

"The NASCAR relationship gives us more visibility, especially with Fortune 100 companies, and that's a really critical part of this deal for us," said Dave Sylvester, who heads IRST.

The four-year deal with NASCAR will expose the race circuit's giant sponsor base and millions of race fans to Ingersoll Rand's security technology. It's also expected to boost IRST's chances of landing jobs at sporting venues nationwide.

"All NASCAR official sponsor deals are multiyear, multimillion-dollar deals, but when you look at the importance that NASCAR will be putting on the goods and services Ingersoll Rand will be providing, and what that means to other Fortune 500 companies involved in NASCAR, I think the value of this deal increases exponentially," said Zak Brown, president of locally based motorsports marketing firm Just Marketing. "Official sponsors carry NASCAR's stamp of approval, and I think that carries some weight."

IRST has already produced a safety and security manual for NASCAR and now the company will begin installation of high-tech security equipment in NASCAR corporate headquarters and three other primary facilities. Though tracks hosting NASCAR races are independently owned, NASCAR officials said track operators would be encouraged to work with IRST. For its Busch, Craftsman truck and Nextel Cup races, NASCAR uses more than 30 tracks nationwide.

"Before a race is sanctioned, a track has to meet our security standards," said Tim Christine, NASCAR director of security. "[IRST] is going to be intimately familiar with those standards."

The installation of high-tech security equipment such as biometric hand and face readers, closed-circuit TV monitoring systems and custom communications systems in a single track could represent a multimillion-dollar piece of business, said Bill Zalud, editorial director for Security magazine, an Illinois-based trade publication.

Cumulatively, security experts said, Ingersoll Rand could be looking at well over $100 million in NASCAR-related business, and that doesn't include any work IRST might drum up through networking with other sponsors.

"This is no ordinary sponsorship for Ingersoll Rand," Zalud said. "It's absolutely huge."

And it could speed IRST's growth as a vendor for a variety of sports venues. The company just completed a security overhaul for Shea Stadium in New York and has equipment installed at Conseco Fieldhouse and the RCA Dome. Ingersoll Rand also has equipment installed at the Indianapolis Motor Speedway, which hosts NASCAR's most highly attended race, the Brickyard 400. IRST officials said they plan talks with IMS officials in hopes of gaining future work.

IRST also has done work on European sporting venues, especially soccer stadiums, where security has been a concern for more than a decade.

A security contract for a major sports venue tends to generate business over several years.

"Safety and security work with sports venues has to be proactive and preventative," said Victor Cooper, Philadelphia Eagles director of facilities and stadium security. "To accomplish that, it has to be cutting-edge. It's a never-ending job."

IRST began talking with NASCAR sponsorship representatives last year. Then Christine got wind of the conversations.

"I was looking for a security partner, and was familiar with Ingersoll Rand," Christine said. "NASCAR hosts 17 of the 20 biggest sports event in the U.S., so security has become paramount."

As part of its deal with NASCAR, IRST will have signage at NASCAR races and a presence on TV broadcasts, plus will be allowed to use NASCAR marks in its own promotional materials. But the corporate networking with other NASCAR sponsors could be the most valuable marketing element, sports marketers said.

Just Marketing's Brown, who represents a handful of NASCAR's biggest sponsors, including DeWalt Tools, Subway restaurants and Crown Royal, said sponsor loyalty extends beyond fans.

"There's a lot of networking among these sponsors and Ingersoll Rand is going to be front and center before these corporate heads week in and week out," Brown said. "NASCAR is the strongest of any North American sport in its relationship with Fortune 500 companies and part of that strength is the loyalty they show each other."

Christine said Ingersoll Rand will look at security measures on multiple levels. IRST's initial focus will be on employing security around drivers' trailers, garage and staff-only areas and other facilities, Sylvester said.

Then IRST will focus on luxury suite and other VIP areas where identification badges are required. IRST will next expand its attention to the entire perimeter of the track, Sylvester said, addressing things such as ticket security and emergency evacuation infrastructure and procedures.

Some of the security measures will even guard against tampering with racing equipment by the teams themselves. Already, IRST has deployed a system using RFID technology to monitor tire use.

But a larger thrust will be securing fans, drivers and race officials from security threats.

"This is about business," said Security magazine's Zalud. "In the post-9/11 era, there's a need to tell fans and sponsors they're in a safe, friendly environment."

And, Zalud added, if NASCAR can develop uniform security procedures, it should be more cost-effective for the tracks that adopt the measures and easier for NASCAR to monitor.

"NASCAR is very professional in managing big volumes of people," IRST's Sylvester said. "We have to take a closer look at the security surrounding that."

Racing insiders said Ingersoll Rand will be challenged in securing some of the older tracks and maintaining the fan-driver interaction that has made NASCAR famous.

"We can't just put up walls and fences around everything," Sylvester said. "We don't want to do anything to hurt the ambience NASCAR has worked so hard to achieve. While that may be one of our biggest challenges, it's also one of our biggest opportunities to show what we can do."
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