Would a Hikvision / Pelco Deal Make Sense?

Author: John Honovich, Published on Feb 05, 2013

A persistent industry rumor says Hikvision and Pelco are in talks to do a merger / acquisition. Who knows the truth. Even if there are some talks, that does not mean anything will come of it.

In this note, we examine if it would make sense. It might happen, it might not but if it did, would it be a good deal and for whom?

* ********** ******** ***** **** ********* *** ***** *** ** talks ** ** * ****** / ***********. *** ***** *** truth. **** ** ***** *** **** *****, **** **** *** mean ******** **** **** ** **.

** **** ****, ** *********** ***** **** *****. ** ***** ******, ** ***** *** but** ** ***, ***** ** ** * **** **** *** *** ****?

[***************]

Hikvision's **** ******

************ **** ******* **********, ****** ** *****'**************** *******, *** *** **** **** $* ******* *** ***** revenue, ****** **** *** ** ***** ************. **** ** ~* times *** **** ** ***** **** ******* ** ~$*** ******* USD (************'* **********). ****'* **** ************* ***** ******* *** ****** **** *** a ***** ************ *******. ********, **** *** ********* ********** **** net ****** **** **% (*** ******* ********* *** ********* ** the *****).

****, ********* *** * ******* ********* *** * *** ** cash ** ****. *****, ********** ** ***** ~$** *******. ** *** **** ** ***********, ****'* **** **** * times****'* ************ ******** ***** ** ***** ***** ************ ******* ** *** Americas. ****, ********* *** ***** **$* ******* *** ****** *** ****.

Hikvision's **********

***, ** *** **** ******* ***** ***** ************, *** ***** conclude **** **** ******* *** ************** ********** *** *********** **** far ******* *** ***********. *******, ****'* *** **** *** ****. On * **** ******* / ********** ***********, *** ******* ** middle ** *** ****, ** ****, **** ** **** **** solid ********* **** **** *** *******.

************ **** *** *** ** *** **** ***, ******* ** its **********, *** ******* ******* ** *****. *** *******, ** the **** *** *****, ********* *** ******** **** ******* ******* Safe **** ******** ********* **$*** ******* *********** *******. ******, ****** *** *********'* ******* ***** ********** ** *****. ***************** **** ******* **** ** ****** **** *** ****, **** are ***** ****** ** **** ***** ***, ******** ******* ***** core '**** *****' *********** *********.

Hikvision's ********* **********

************** ** ** * *** **** ****** ******. **** **** a **** ********* *** * *** ** ****. *** *** to ********** ********* ***** ** ** *** ** *********** ******, rather **** **** ***** *** *** **** ** ********* ************* into ******* *******.

***** ***** ******* * **** **** ***** ***** *** ** established ******* ***** ********* **** ********* ***** *** **** *** 'global **********.'

Schneider ******** / ***** **********

********* ******** **** ***** *** *** *** *** **** *+ years,********* ***** ** **** *** ~$*.* ******* ***. ** **** ****, ***** *** ~$*** ******* ** *******. We ******* **** *****'* ******* ***** ** ***** ******* ** that ***** ** *** ******* ******* ****** *** *********** **** providers *** ******** **** *** **** * *****.

Schneider's **********

** ******* ********* ***** ****** *** ***** **** ***** ** hugely ********* ****** ********* ******* * ***** *****. ** *** one ****, *** ***** *********** **** *** **** **** * huge *******. ** *** *****, ** ** * ***** ************* asset ** *** ******* ********* *********. ***** ********* **** ** Pelco's ******* ** ****, **** ******* ** *** *** ** line *** ****** ********* ***** (***** *** ******** ******** *** less **** ** ******* ********* ******* ************).

******* *********, **** **** * ****** ********* ******** ***, ** willing ** ************* ******* ** ******** *********.

Will ** ****?

****** * **** **** **** **** ** * **** ****, unless ********* ** ******* ** **** ***** ** ** **** sale ****** (***** ** *****). **** ** ********* ******** *****, there ** **** ******* ** ******* *********** / *********. ***** they *** *** ******* **** *** **** *** ***** ***** and *********? ** **, ****'* ** ********** **** **** *** such ** ******. *******, ***** ***** *** ** **** ******** customers, **** ***** **** **** ** ******** **** ** ***** existing *********. *** **** ** ********* ***** ***** *** **** structure **** ***** ******* ***** *************, ** ***** ** ****** impossible ** **** ***** ** *** ****** ****** **** ***** within *****.

**** ***** *** * ***** ***** *** * *********** **** if, *** ** **** *** **** * *** ** ***** to **. ** ** *******, ** **** ********* ** ***** a *********, *** ****** ** ***** *** ** ******* ********* is ****** *** ******** *** *** ************* **** ***********.

******: **** **** *******

******** ******* **** **** **** *** **** *** ** ******** negotiations *** ********** **** *******.

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