Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.
Issue link: http://sdi.epubxp.com/i/941796
10 Security Dealer & Integrator / www.SecurityInfoWatch.com February 2018 Read the full article: www.SecurityInfoWatch.com/12390755 SECURITY WATCH BY JIM MCHALE, DIRECTOR, MEMOORI RESEARCH In 2017, security industry M&A; was valued at $6.213 billion, which looks like the start of a new wave of growth. With the structure of the industry still very fragmented – with hundreds of small companies finding it increasingly difficult to compete – it looks inevitable that the general trend line of value and volume of M&A; will continue upwards over the next five years in the security industry, accord- ing to market reserach firm Memoori. In the video surveillance market, there is a need for the leading western players to go for scale and quickly, and M&A; is the most appropriate strategy to achieve this. The rea- sons for this are twofold: to fight off Chinese manufacturers that are now much larger and are winning share in developed markets; and also to meet the longer-term trend of commoditi- zation of IP network cameras. Although industry M&A; in 2017 was only one-third of the $19.73 billion realized in the previous year, if we take out the Johnson Controls-Tyco merger, then it is almost double the size by value and 30 percent more by number of deals than in 2016. Memoori forecasts that 2018 will be the start of a new wave of growth that will reach $7.85 billion by 2022. To achieve this, it will require a num- ber of billion-dollar deals and, based on past history, these will distort the picture on an annual basis but the trend line will be a gradual increase in M&A; activity over the next five years. Public equity will continue to dominate M&A; for the next few years, with many of the larger players sitting on substantial cash reserves. Private equity has in the past been a major source of funding for acquisitions, but since 2012/13 it has declined. document reader line and 3M's inter- nal secure identity materials business. HID Global's purchase of Mercury Security for an estimated $250 million. Vivotek's potential Delta Group ownership. As one of the largest remaining independent video sur- veillance manufacturers, Vivotek has received an offer to become major- ity owned by Delta Group, a Taiwan- based conglomerate. Bain selling Uniview to Hangzhou Jiaozhi Technologies Co. The price paid for Uniview was $535.5 million – we assume that Bain would have approached/invited a number of western companies to make a bid. This could have been the moment for a foreign manufacturer to seize the opportunity to both build up scale and get established in China, the largest single market in the world for video surveillance equipment. Most players believe the video sur- veillance market is too fragmented, and consolidation could well lead to a market dominated by no more than 10 players within the next 10 years. If the "race to the bottom" does not achieve Hikvision and Dahua's objective of rapidly gaining very sub- stantial market share, they are likely to spend on acquiring their western competitors. For more information about Memoori's report, "The Physical Security Business 2017 to 2022, Access Control, Intruder Alarm & Video Surveillance," please visit www.memoori.com. ■ Top Story Security Industry Poised for Increased M&A; Market research firm predicts 2018 will kickstart a new wave of deals Deals in 2016/2017 which totaled more than $100 million that will strengthen the physical security business include: Flir's acquisition of Point Grey Research and Prox Dynamics AS. Point Grey is a developer of machine vision cameras for use in industrial, retail, scientific, traffic, mapping and other advanced imaging applications; Prox Dynamics AS develops and manufactures unmanned aerial sys- tems (UAS) for military and para-mil- itary intelligence, surveillance and reconnaissance applications. Oburthur's acquisition of Safran's Card Systems and Identity divisions. Advent Intl., a global private equity fund, acquired Oberthur Technologies in 2011. The fund's objective is now to bring together Safran I&S; with Oberthur Technologies (now called IDEMIA) to create a global player in the domain of identity technologies strongly rooted in France. Gemalto's purchase of 3M's identity management business. Three key components of 3M's port- folio will become part of Gemalto's Government Programs business: the biometric offerings that came to 3M following the Cogent acquisition, a Memoori forecasts that 2018 will be the start of a new wave of growth that will reach $7.85 billion by 2022.