Who Will Buy Out Avigilon?
The level of credible chatter about an Avigilon buyout has reached a new high. There certainly appears to be negotiations happening.
Related: So far, Avigilon is the top choice in our $500 betting pool.
Can a deal be reached? Who will pull it off?
[March 2017 update: Credible information continues to point to an Avigilon acquisition negotiation in progress.]
[January 2018: Avigilon Acquired By Motorola Solutions]
Hikvison I called it first and will spam post unholy amounts of epic memes after its done.
John - what is this based on? Is it just chatter in the betting pool thread?
My vote is Hanwha. I've heard a lot of chatter inside the organization from people who would know that supports it as well.
Hmmm, all good guesses. I'll go out on a limb and say Schneider Electric. No particular reason. (It's a running gag of mine in this office)
I know it may sound crazy, but it would not be of a surprise if Stanley acquired them. This is not based on a wild guess.
Another company with a great record of acquisitions...
IPVMU Certified | | 02/06/17 09:28pm
oy vey.
Would this sale include their access control product line?
Dare I suggest Siemens? Maybe a tit for tat / shot across the bow play- with regard to JCI?
My guess would be UTC (Lenel) as their camera line and VMS are not up to par, and it would impact their business in a truly positive way...and hopefully, they wouldn't kill it over time.
02/06/17 03:15pm
Hikvision buying out Avigilon makes little sense to me. Avigilon would instantly become hated brand #2, behind Hikvision. Avigilon would ALSO become owned by the Dark Side Chinese gov. What would Hikvision gain? They wouldn't get re-listed on GSA. Their shiny new toy would get the boot from the same list, no?
They wouldn't get re-listed on GSA. Their shiny new toy would get the boot from the same list, no?
I think Hikvision would not only get re-listed but become eligible for America made buying preferences. After all, Avigilon has a Texas factory and that is what the requirements are typically based on.
While I don't think Dahua would buy Avigilon (because Dahua is dysfunctional, etc.), I think it would be a great move for Dahua since their US operations are so early / limited.
By contrast, Hikvision already has a a fairly strong NA operations which would be redundant with Avigilon's. On the other hand, if Hikvision has the money, still could be a strong way to get into the higher end of the market.
| 02/06/17 03:22pm
So wouldn't it be easier and less costly for Hikvision to simply open a "factory" in the US to meet the same standard, vs spending $750M?
Certainly, but I don't think that does anything for their reputation. Avigilon brings a certain amount of legitimacy to the table with regard to the higher end of the market.
| 02/06/17 03:37pm
I just don't think that shine will permeate through the dark fog surrounding the name Hikvision that is so thick these days. I do see your point, but I just think that it would quickly turn from a boost to their brand to negative spin about shareholders.
As a bonus, John could lambast* both Hikvision and Avigilon in one fell swoop.
*Or take money from, as some think, depending on perspective (LOL)
I also don't think Dahua is going to buy them right now as they seem to be spending all their money on hiring people, instead of looking into acquisitions.
You're right- Avigilon gains nothing with a Hik purchase, but Hikvision is instantly legitimized as an enterprise class player. So much so, they might now catch the eye of those who've previous shunned them as a solution- the financial vertical comes to mind.
Avigilon would instantly become hated brand #2...
down from #1?
In the integrator favorability rankings (we are in the process of publishing), Avigilon is in 5th, Hikvision is 15th so there is a lot more integrator goodwill for Avigilon.
...so there is a lot more integrator goodwill for Avigilon.
I believe it.
Theoretically though, couldn't a manufacturer rank #1 in both goodwill and #1 in 'badwill', since you track each independently?
couldn't a manufacturer rank #1 in both goodwill and #1 in 'badwill', since you track each independently?
No, not practically though it warrants a discussion on the nuances involved.
Theoretically, the 'best' way to do that would be to go 50 positive / 0 neutral / 50 negative. That would make the net 0 but with very high positive and negatives.
However, since both Axis and ONVIF scored over 50 positive, that still would not be enough to be #1 in positive score.
Hikvision was an interesting case, though; Their positive ranking was 8th but their net ranking was #15 dragged down by their #2 ranking on negative (thanks Arecont).
However, since both Axis and ONVIF scored over 50 positive, that still would not be enough to be #1 in positive score.
True, though if Avigilon did achieve the polarizing 50/50 good/bad split, it would be the #1 negative score, I believe.
f Avigilon did achieve the polarizing 50/50 good/bad split, it would be the #1 negative score
That's a highly misleading question / supposition since Avigilon had a fairly low negative score of just 15%.
Contrasted to Hikvision below:
Not that I actually know anything about this, but I'd put my money on either UTC or Honeywell, and Pelco coming in a distant 3rd. Both of these large brands have a lot to gain from such an acquisition, as they have large customer bases and neither has a decent video product, so it seems as though it would be perfect.
Just my 2 cents...
What about SoftBank Security Services? After meeting with Trump after the election SoftBank's CEO pledged a massive $50B investment initiative in the US.
Avigilon is a Canadian company but with a manufacturing plant in the US it may be an attractive SoftBank target...
Kamen
I'll put my money on Hanwha buying OnSSI for a song before buying Avigilon. Convergint's equity partner's are on a buying spree, that could be interesting but also unlikely. I'll agree with Rian and say UTC or Honeywell, but I hope it is a company from outside the industry.
I'll put my money on Hanwha buying OnSSI for a song before buying Avigilon.
That's an interesting suggestion.
OnSSI would certainly be the value play, like a ~1/10th of what Avigilon likely wants and would be a more surgical add (just VMS, no camera overlap, etc.).
That's the big decision for anyone considering buying Avigilon, there are many other 'parts' the company could be independently for far less, though certainly Avigilon has its own value / strength both for the 'solution' and potentially for the patents.
There is a good point in your post that I think some are missing. Beyond just cameras, VMS, and a middling access control product Avigilon brings with it a very valuable patent portfolio. Right now nearly every major manufacturer is paying royalties on analytics.
Right now nearly every major manufacturer is paying royalties on analytics.
Yet neither Hanwha nor ONSSI do...
| 02/08/17 03:03pm
How do you know that Hanwha and ONSSI aren't paying royalties for analytics? Do they have the development in house?
i believe Bosch has its own analytics. That noted, there is always a cost whether it's in house development or paying royalties for someone else's development.
How do you know that Hanwha and ONSSI aren't paying royalties for analytics? Do they have the development in house?
To be clear, what one pays to Avigilon for patent royalties does NOT cover software development.
When you license Avigilon patents it is for the concepts / methodology behind the analytics, not code / software. So even if you develop all your own code, you may have (or want to) license Avigilon's patents to avoid being sued.
To be clear, what one pays to Avigilon for patent royalties does NOT cover software development.
Thats a good point. Perhaps Avigilon should consider putting together an SDK with some of their analytics included, for an added fee.
It could make the licensing of the patents more palatable.
| 02/10/17 11:30pm
John, at first I was going to disagree with you. However, I was thinking of licensing royalties, which are typically directly related to development costs. That noted, even audited financials won't tell you for sure whether revenue from one royalty versus another funds development.
That noted, when someone another manufacturer licenses Avigilon's software to be used in their product, even if it's an SDK/API, it is not a patent license. This is what I thought was the typical OEM model. Isn't that the case when a manufacturer/owner of analytic software licenses software to another manufacturer? Among other things, this allows for scalable costing and pricing.
How do you know that Hanwha and ONSSI aren't paying royalties for analytics?
With Samsung, mainly because of this:
With ONSSI, because they were not targeted, AFAIK, by ObjectVideo or any of the other analytic trolls non-practicing-entities. Nor have I heard that they use anyone else's. Also, last time I checked their VA was very rudimentary. And they do have a programming staff.
So why do you think they do?
Doubt that any Chinese company will buy out Avigilon. Their model is to attain intellectual assets via Cyber exploitation not appropriation.
Flir is in acquisition mode, they have been for a few years now and an Avigilon acquisition would give them what they didn't get with the DVTel deal, a growing customer base and quality, high MP cameras. Latitude is good but does not appeal to the masses like ACC.
It would also allow them to end the Analytics debate... Rialto vs FC-ID...
My $0.02
Has anyone mentioned Honeywell buying Avigilon? One would think they would see value in swallowing up the Avigilon dealer network and increase their sales thru ADI.
I'd bet on a very large defense contractor (Top 25 worldwide), that would want to complement a recent, very large acquisition in cyber-security.
Are you offering odds on the other side of this? I would bet handily against that happening. :)
02/08/17 02:18am
Here is a guess of who will be the purchaser of Avigilon...AMAG / G4S. Their SMS uses Sailient as its integrated video management system. Sailent, in my opinion, is way over-leveraged as a national (much less international) manufacturer. Isn't it more of a mom-and-pop organization, which is extremely unstable given the investment under AMAG's market?
In any event, the downside for an AMAG / G4S purchase is that the industry would lose an independent camera and VMSmanufacturer.
Is there a $500 reward for guessing the purchaser?
Update: Credible information continues to point to an Avigilon acquisition negotiation in progress.
Keep an eye on GE they have the money and may want the patents and analytics and push the development into the manufacturing and distribution applications. I see a big opportunity for a non security player to pay for the acquisition with traditional security sales and to move into the next big market of video/ enabled business applications.
Honeywell? Or will they (Honeywell) buy ONSSI?
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