The security market in 2015 was in many ways eventful and will characterise 2016, not least the many mergers and acquisitions that were conducted.
Acquisitions in the global security industry took off sharply in 2015. It started in the video surveillance subsector when Canon made a bid for Axis, worth nearly 23.6 billion Swedish Krones (2.8 billion US-dollars). Canon has so far been content with a stake of just over 85 percent.
After the Axis/Canon deal came some truly interesting acquisitions and mergers. In the access control and electromechanical lock subsector Allegion’s purchase of Simons Voss for 210 million Euros was a deal that attracted much attention as it happened simultaneously with Allegion’s acquisition of Axa Stenman for 185 million Euros. Axa Stenman is a manufacturer and provider of branded bicycle locks and lights as well as a wide variety of window and door hardware.
But perhaps the biggest individual deal related to access control and locks as well as accessories for door environments was of course the merger between the Swiss company Kaba and Dorma from Germany. The combined sales of the two companies are approximately 2 billion Swiss Francs (1.8 billion Euros), and with around 16,000 employees located in 53 countries, Dorma+Kaba will move up into second biggest manufacturer position in the access control and lock segment. Only Assa Abloy is ahead.
On the video surveillance page, interesting things continued to happen. Not least in the field of video management systems. For example, the Israeli software company Nice Systems, made an agreement to sell its business unit for video surveillance to the American investment company Battery Ventures for $ 100 million. Almost as much - $ 92 million – was paid by Flir Systems for the acquisition of Dvtel, a company also best known for its VMS solutions and its video analysis, but in addition, is a provider of video encoders, cameras and servers.
The American VMS company On-Net Surveillance Systems, Inc. (ONSSI) took the decision to acquire Seetec, the German vendor of VMS solutions- Seetec was another message that the VMS sector is well into its consolidation phase. In 2015 the acquisition of Siemens Security Products was completed by Vanderbilt, although the agreement had already been signed in 2014.
Finally, we cannot fail to mention Securitas’ acquisition of Diebold’s security business in North America for 350 million US dollars. This acquisition should be noted in the light of the hard drive by Securitas to quickly increase the company’s share of technology-based services in their security portfolio, which is still dominated by manned guarding services.
Now it is 2016 and the market has already been shaken by two major business deals. Honeywell’s 480 million dollar acquisition of Xtralis is one of them. The other is Johnson Controls’ merger with Tyco, where the shareholders of Johnson Controls will own 56 percent of the equity in the combined company and receive a cash payment of approximately 3.9 billion US dollars. 44 percent of the equity in the combined company will be owned by the current Tyco shareholders.
The consolidation of the security industry will continue for sure during 2016. We will see more big acquisitions. The questions are which companies are going to be acquired and which companies will be the buyers. We can only speculate about that. Will, for example, the big Chinese video surveillance product providers, like Hikvision or Dahua, make any acquisitions in Europe or North America? Will Pelco, the video surveillance product business of Schneider Electric, be acquired in 2016? Will Avigilon expand through acquisitions or will this fast growing Canadian company be acquired itself? And how satisfied is Canon after the acquisition of Milestone Systems in 2014 and Axis in 2015? Will we see this giant manufacturer of consumer electronics make another acquisition in the security industry in 2016?
Well, we can assume that 2016 will be another eventful year, characterised by acquisitions and further consolidation of the global market, which – of course – will affect the security industry locally as well.