Axis Acquires Intercom Manufacturer 2N

By IPVM Team, Published May 30, 2016, 01:50pm EDT

Axis has now made its second acquisition in the past 3 months. And it is another company most industry people know little about.

In this note, we examine Axis' acquisition of Czech intercom specialist 2N, their financials and how 2N's IP intercoms compare to Axis. Updated with the purchase price, profits and revenue (July 2016).

2N **********

**** * ***** ******** based ******** ************. **** primarily **** ** **** with ******* ******** ** the ********.

******* ***** *** * mix ** ****** ***** *********** ***** *******. *** IP ***** ********* ********* ************** ********* ************.

Financial *******

**'* ********** ***** ********* reports ******** ~$** ******* annual ******* ** ****, with ******* ******* *** notable ******* ******* ***** 2009. ***** ******* *** scanned ****** ** ***** (view ******* ************* ************).

******: **'* **** ***** were ******** ~$**.* ******* USD (*** *** *******), for * ****** *.*% average ****** **** ***** 2013. ******* *** ****** still ********** ** **** reported ******** ******** ********* profit *** ** ***** the ***********.

Purchase *****

**** **** ~$** ******* USD (***.* * ***) for **, *********** ** **** ** filing, **** **. **** ** * 2.4x ****** ** ***** ratio ***** ** ********** high ******** ** ***** industry ************.

#1 ** ** *********

**** **** ** ** #1 ** ** ******** sales, *** ***. **** may ** ****, *** IP ********* *** * very ***** ******, ** shown ** **'* ***** revenue, ***** ******* *** more **** **** ** intercom, *** *** ******* amount ** ** ********* even ********* ** *** market (********* **** *** offerings).

Axis ** ** ** *********

*** **** *****-** [**** no ****** *********] ** video ******** ***** ****** ** ********** ******** *******:

** *******, ** ** more ************ ** ** intercom **** ** ** 54 **** ******* *** options *** ***** ****** readers, *** *** **** unit ** **** ****** as * ***** **** with ****** ********** *** more **** *********** **** viewing/recording *******.

  • *****: ** **** ****. In ***** *************, *** 2N ** ~$***, ***** the **** ** ~$****.
  • ********: ** **** **** too. ****** ****' ****** call ******, ** ******** the ********* ** **** up ** ** ****** directly. **** ***** ******* SIP *** *** ************.
  • ******: **** **** ** the ***** *****. ** the *****, ** ******** a ******* ** ***** camera **** * ** degree *** *** ** IR. ******* ** **** via **'* **** ** a *** ******* ********* ***. ** *** ***** side, **** ******** * 1.3MP, ** ****** *** with ***** ** ***. Axis **** ******** ***** S ** *** **** popular ***** *** ****** to **** ********** ********* platforms.
  • *****: **** *** ******* equal, *** ******* ****** seperate ** ***** ** use ***.
  • *******: **** ***** ****. 2N ****** **** ******** or **** ***** * cover **********, ***** **** is **** ***** ** default.
  • ***********: **** **** **** for ******* ************ *******. Both ***** *** *** PBX, *** **** **** VAPIX ******* ****** *********, while ** ********* **** it's *** ******** *** clients *** ******* **** limited ***** * ******* on * *** ******.

US ******** *******

** ** *********** ******* in *** **, ** they *********** * ** office **** ~* ***** ago *** *** ***** distributors ***** ****. ***** Anixter ****, ***, **********, and *** ******** ** others ** ***, **** their ******* ********* ***** a ***** ******** ** Axis. **** ** *** presence *****,** ***** ***** *********** in * **** *****. For *******,*** ******* *******, ******, Viking *** **** ****** lines **** ******* *** Stentofon ****** *** **** with *&**.

2N **** *** ****** ***********

**** ****** "*** ** ***** **** remain", ******* **** **** said "*** ***** ********** will ******* ********* ******* and ********* **** ***** in *&* *** ****** access" *** "** *** benefit **** ****’ ****** market ******** *** *&* resources."

***** ********** ******** *** two *********' ******** *** sales/marketing ***** **** ***** together **** * ****** management *********, ***** ** will ****** ****** ** Axis ******* ****.

Reflection ** ******* ****** ******

****** ** ****** ***** intercoms, *** **** ** their ******** *** ****** audio. ** *** **** acquisition ** * *** for **** ** *********, and **** **** **** applications ****** *****, ***** they **** **** *********** from ********* ** **.

****************

**** ****** ** **** to ******** ***** ***** by ************* ** ******** into ***** *****, ********* and ******* **********. *** clear ******* ** *** Americas ***** **** ********* more **** **** ***** revenue ***** ** *** very ******* ********. ********, Axis ********** **** ** has "****-*********** ***** ******** ******* electricians *** ******* ********** as **** ** **** manufacturers." ********, **** *** be **** ** *****-**** more ******* ** ***** non-traditional ***** ******** *** already *** **.

Limited ******

**** ** *** **** case ******** ** **** being **** ** **** 2N's ******* ****** ****, 2N *** *** ***** intercom ****** ** ******* 1/100th *** **** ** Axis *** *** ***** surveillance ******, ** *** net ********* ** **** top **** **** ** limited.

*******, ** **** *** continue ** *** **** these **** ****** (**** their *** *********** ********** *** ****** ***), it ***** ******* * modest **** ** ******* away **** *** ******* hollowing *** ** *** mainstream ***** ************ ******.

Comments (45)

Avatar

Paul Curran

05/30/16 06:50pm

Smart move to be honest. 2N make good kit, we have used a lot of Helios IP intercoms. They are well made and last.

Eric Fleming Bonilha

05/30/16 09:04pm

do you have any information on how much Axis paid for them?

John Honovich

IPVM | In reply to Eric Fleming Bonilha | 05/30/16 11:24pm

Axis did not disclose in this announcement. It might be included in a future quarterly or annual financial report.

As a point of comparison, for Axis' last acquisition, Citilog, they paid ~2x revenue. Citilog was quite small (~5-6 million Euros annual revenue). I would expect the valuation to be for a similar multiple. If Axis does disclose in a future financial report, we'll update this post.

John Honovich

IPVM | In reply to John Honovich | 05/31/16 11:03am

Axis' CEO declined to comment on financial details but did note to us:

Details at the same level as provided for Citilog in our Q1 report however will be included in our Q2 report.

Historic data for 2N could very well show revenue fluctuations, they have made a shift from legacy PBX, GSM gateway products to today's focus on IP Intercoms and a few other new products.

When Axis releases the Q2 report in July/August, we will update this post accordingly.

John Honovich

IPVM | In reply to John Honovich | 07/12/16 01:52pm

UPDATE: 2N's 2015 sales were reported ~$23.5 million USD (SEK 200 million), for a modest 8.5% average growth rate since 2013. Profits are likely still negligible as Axis reported modestly negative operating profit for 2N since the acquisition.

Purchase Price

Axis paid ~$56 million USD (475.9 M SEK) for 2N, as disclosed in Axis Q2 filing, page 10. That is a 2.4x prices to sales ratio which is moderately high relative to other industry acquisitions.

Undisclosed #1

IPVMU Certified | 05/31/16 12:04am

These statements indicate the two companies' products and sales/marketing teams will merge together into a single management structure, where 2N will likely become an Axis product line.

Do as I say, not as I do...

Toni Alvarez

05/31/16 07:17am

Does it support audio as well?

since it's onvif compliant, I guess Avigilon can run it...?

Avatar

Luis Carmona

IPVMU Certified | In reply to Toni Alvarez | 05/31/16 11:56am

Their video feeds have been recorded on Geutebruck systems for few years now, but don't know about the audio. Our phone systems vendor has then tied into our desktop phones.

Michael Miller

In reply to Toni Alvarez | 05/31/16 01:26pm

@Toni Alvarez yes the 2N intercoms work with Avigilon but you need to pay for the license to unlock the advanced features in the intercom.

We have a couple of customers that have the 2N intercoms integrated into Avigilon with the VOIP interface in the Cisco phones. The video works but its low quality and low resolution.

We are also seeing more of an interest in intercom solutions and I only see the demand growing more. Having a fully integrated video/access/intercom solution will be really useful.

Toni Alvarez

In reply to Michael Miller | 06/03/16 06:48am

Thanks Michael,

do you mean your customers are going thru PBX with 2N to be able to go into Avigilon?

My "ideal" scenario will be this 2N video+intercom device fully integrated as onvif device into any Onvif VMS.

Right now we are adapting analog boards - button, speaker and MIC - with Avigilon encoders with audio in+out.

This solution is running pretty well, but sometimes noisy (but cheap!).

Avatar

Michael Votaw

In reply to Toni Alvarez | 06/03/16 03:22pm

No, the 2N gets registered on the VOIP exchange as a device. It can also talk directly to a SIP enabled product like a phone app, a PC running a SIP client or maybe Avigilon if it can talk SIP natively. I don't know exactly what the Avigilon VMS can do. The 2N reps are getting good at these deployments, I'd give them or Avigilon a call and ask if they directly integrate. You can put the video and audio together in the SIP stream too and answer a video call on a Polycom SIP desk phone and unlock the door remotely.

Undisclosed #2

05/31/16 11:52am

We're seeing pretty phenomenal growth in the IP intercom field locally. My guess is that Axis is taking a run at competing against Commend (and to a lesser extent Zenitel). I have been speculating for a while that their entry level intercom units they have been introducing were exploration of the market viability. If they can make a full featured intercom system that is easier to configure than Commend they may be very successful.

Avatar

Luis Carmona

IPVMU Certified | In reply to Undisclosed #2 | 05/31/16 12:00pm

I think they'd have to put in a lot of work to make it a Commend or Stentofon competitor. I'm not an expert in 2N, but from what I've seen it's more in the field of Aiphone or Valcom or something like that. They'd have to put in a lot to compete with the upper echelon I would guess.

Undisclosed #2

In reply to Luis Carmona | 05/31/16 02:05pm

No disagreement there. However, if Axis is looking to differentiate due to the Hikvision push to turn cameras into a commodity, this would be one area that they would be able to push into fairly easily. Certainly it would be easier for them to begin to push into IP intercom than it has been access control. I don't know about Stentofon/Zenitel but Commend video intercoms are already using Axis cameras.

Avatar

Brian Rhodes

IPVMU Certified | In reply to Undisclosed #2 | 05/31/16 02:09pm

Interestingly, 2N also offers an access control product line that appears roughly basic and on-par with Axis Entry Manager.

Undisclosed #1

IPVMU Certified | In reply to Brian Rhodes | 05/31/16 03:12pm

...2N also offers an access control product...

Used 2N-ter.

Avatar

Brian Rhodes

IPVMU Certified | In reply to Undisclosed #1 | 05/31/16 09:22pm

You make sales taglines look easy.

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Brian Rhodes

IPVMU Certified | In reply to Luis Carmona | 05/31/16 09:20pm

In general, 2N appears to match the core features (equal or better) than Commend or Zenitel/Stentofon.

I'm curious what features 2N lacks. Believe me, I understand that specsheet claims are a lousy metric for comparison, especially in terms of management or integration, but is there a big gap that excludes 2N?

John Honovich

IPVM | In reply to Undisclosed #2 | 05/31/16 12:00pm

2, where are you seeing IP intercoms most frequently used? For every traditional camera deployed, how many IP intercoms do you see being bought?

I believe you that the growth is high but that's not hard when the base is low. I would be curious to hear from you big you think it could get based on the questions above.

Undisclosed #2

In reply to John Honovich | 05/31/16 08:09pm

IP intercom is increasingly popular as we replace legacy analog intercom systems in the industrial market. The higher end products (e.g. touch screen, video intercom) are also going into many offices and high-rises in our market. It is not a significant quantity of devices in comparison to the other security products we deploy. However, when compared to the handful of extremely basic (Talkaphone, Aiphone) systems we sold a year ago the revenue per unit has increased significantly.

I cannot say it will ever grow to rival the access control or surveillance market. Axis has to look somewhere to replace lost revenue and shrinking margins.

Undisclosed Manufacturer #4

In reply to John Honovich | 06/01/16 02:14pm

2N OEM's to Control4 in the neighborhood of 4-5k units roughly per year and growing is my guess. So doing really well in the high end residential business as well. This will be a great add on segment for Axis no doubt.

Undisclosed Manufacturer #5

In reply to John Honovich | 06/01/16 04:09pm

John,

Beside the typical door applications, using IP intercoms for parking call stations and for shelter in place applications. Would guess typical ratio is 1 intercom per 25 cameras.

Avatar

Luis Carmona

IPVMU Certified | 05/31/16 12:11pm

By the way, we buy 2N from CSC. It may be a limited regional thing, though.

Avatar

Brian Rhodes

IPVMU Certified | In reply to Luis Carmona | 05/31/16 12:13pm

Thanks, I updated our report.

Undisclosed Manufacturer #3

05/31/16 01:11pm

I believe 2N was weakest in the US, having built the company from their Czech headquarters and into Europe, with only a cursory presence in the US until 9 months ago.

At that time they found a US VP of Sales (previous US VP was out of Czech Republic) in Craig Szmania...who was Interlogix-->Napco-->2N VP of Sales. He found some US Regional Sales Managers and began to get some name recognition. Maybe he helped gain the attention of Axis? Who knows?

Solid product in a growing market. Closer to Commend than Aiphone both in technology and quality. Market isn't growing quickly, but not as slowly as PSIM...(chuckle). Maybe one 2N Intercom is sold for every 1000 IP cams sold--just an educated guess.

Avatar

Gert Molkens

IPVMU Certified | 05/31/16 04:24pm

Over here in Belgium, 2N is distributed through ADI just as Axis is...

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Brian Rhodes

IPVMU Certified | 05/31/16 09:07pm

Here's a quick rundown of Axis A8004-VE video intercom and 2N Helios IP Vario video intercom:

In general, 2N is more configurable as an intercom with up to 54 call buttons and options for added access readers, but the Axis unit is more useful as a video unit with higher resolution and more easy integration into viewing/recording systems.

Price: 2N wins here. In basic configuration, the 2N is ~$600, while the Axis is ~$1200.

Intercom: 2N wins here too. Unlike Axis' single call button, 2N features the functions to ring up to 54 routes directly. Both units support SIP and PBX integrations.

Camera: Axis wins on the video piece. 2N features a 640X480 SD board camera with a 55 degree FoV and no IR. Viewing is done via 2N's apps or a few vendors like Bosch VMS. On the other side, Axis features a 1.3MP, 97 degree FoV with built in IRs. Axis also supports ONVIF S or the very popular VAPIX API common to most mainstream recording platforms.

Power: Both are roughly equal, and support either seperate DC power or use PoE.

Housing: Axis edges here. 2N offers IP50 standard or IP53 using a cover bracketing, while Axis is IP67 rated by default.

Integration: Axis wins here for typical surveillance systems. Both offer SIP and PBX, but Axis uses VAPIX already widely supported, while 2N primarily uses it's own software and clients for viewing with limited ONVIF S support on a few models.

Michael Miller

05/31/16 09:46pm

@Brian not sure if it has changed but the last time I worked on the 2N units you needed to pay for an "advanced license" to get 3rd party VMS platforms to connect to the camera in the 2N units. Not sure if this has changed or what the cost is anymore.

Avatar

Brian Rhodes

IPVMU Certified | In reply to Michael Miller | 05/31/16 09:53pm

That's interesting. Do you recall with VMSes required this? I'm presuming this is in addition to normal license fees.

Eric Fleming Bonilha

In reply to Brian Rhodes | 05/31/16 09:57pm

I guess that will totally depend on the VMS... I would not expect that, as it should be treated as a camera, at least in our VMS that is what happens...

Michael Miller

05/31/16 10:01pm

I think it was to turn on ONVIF support so any VMS would apply. We used Avigilon with the 2N units the customer purchased. This was well over a year ago so maybe things a have changed.

Edit found this:

Michael Miller

05/31/16 10:11pm
Here is a link the all the licensing options: http://www.2n.cz/download/4/5/2/2/helios-ip-licencing-fw-2.11.0.pdf
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Shaun Castillo

IPVMU Certified | 06/01/16 02:30am

We've used 2N intercoms with Genetec (Sipelia) very successfully. For the price point, it's a solid product.

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Michael Votaw

06/01/16 12:21pm

2N is a awesome product and with solid US support since Craig took over. We have been installing them for almost three years with no issues and the price point is very solid for what they do. We are quoting out 4 more units this week already. It's a growing market, but you'll find a lot of camera guys don't understand them as you have to have competency in the VOIP world as well as video and network. We've been buying through ABP Tech for years. I had great hopes for 2N moving forward, but 35 years in this business has shown that acquisition by a global player is inevitably not going to benefit the product.

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Greg Hussey

06/01/16 12:45pm

My opinion, 2N was a great purchase. Large legacy companies such as Aiphone, Stentafon and Commend will go away over time, they are being jumped over/leap frogged by these little IP based edge devices. For example with Genetec's SIP solution we can do many of the core features of a Commend or Stentafon end to end solution. Also based upon the fact that there are free or practically free SIP server software solutions available such as Brekeke out there. I am not saying that a "real" end to end solution is not significantly superior but when core features are free, just that we have all seen this pattern before i.e. VMS software, same model. Ask why Aiphone doesn't make a SIP AV intercom end point? They can't get out of their own way, too much baggage to realize the market has gone past them. At the last ACCCCCC, they were clearly going in this direction - intercom/paging but when they saw 2N, I am sure it made sense to purchase them then to continue to develop internally. Opening up these products to their existing distribution channel and workforce I think will make them alot of money.

Undisclosed Manufacturer #6

In reply to Greg Hussey | 06/01/16 09:43pm

IP intercoms... is that a growth market? Like access control... how many times to do upgrade a solution like this? Isn't an Axis camera with two-way audio an intercom?

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Luis Carmona

IPVMU Certified | In reply to Undisclosed Manufacturer #6 | 06/02/16 01:18pm

Video aims to raise visual awareness. (Vision) Access controls, well, physical access. (Touch) Intercom, with its design specifically for two-way communication, covers the audible. (Sound) What amazes me is so few video and access control interfaces have allowed for integration with two-way, at least intercom-like communication. I know some do, I'm surprised more don't, and just another example about how slow and poorly this industry has moved on innovation and progressive technologies.

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Michael Votaw

06/02/16 12:19pm

I think it is a growth market. As the product matures, we are seeing more users want them at gates and main entries as they can connect to their main sip exchange for call routing. Upgrades are continual as the systems evolve. A camera with two-way audio is far from an intercom and typically won't integrate to the exchange for call routing.

John Honovich

IPVM | In reply to Michael Votaw | 06/02/16 12:26pm

Michael, I agree.

The question seems to be more of how much growth? For example, one member above estimated 1 IP intercom for every 25 cameras, another 1 every 1000 cameras. If its the former, that's fairly big upside; but the latter not so much.

My rough guess is that, unless the Chinese enter this space, in 5 years, it could be ~$50 million business for them, which would be good but still relatively small compared to their current ~$800 million business.

Avatar

Ethan Ace

IPVM | In reply to John Honovich | 06/02/16 01:55pm

In China, both Hikvision and Dahua sell IP intercoms, though I've (somewhat surprisingly) seen little movement on them being released in North America (aside from IC Realtime OEMing Dahua).

Michael Miller

06/02/16 01:19pm

I think this is something that requires you to educate the customer first. In my experience most customers have no idea that a VOIP video call box exists as most commercial buildings still have VOIP phones used a intercom stations. I could easily see one intercom per building getting installed for commercial customers. For the healthcare customers I could see a lot of interest IMHO.

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Michael Votaw

06/02/16 01:30pm

I think IP intercoms will gradually replace a lot the traditional units from Aiphone, Linear, Doorking etc. It's a pain and a challenge to run analog interfaces on VOIP systems as most techs don't understand the 40 pages of setup for even a simple Cisco box and it adds another part. They are still valid product, but they don't integrate. It is a small market, but the Chinese are entering wellcam-ipcamera.com. I am seeing growing adoption for larger enterprise clients. The interesting thing is that the traditional VOIP companies don't have one for their systems and folks like Polycom don't make them either. That's were 2N was making inroads I believe. We are using them on Interactive Intelligence exchanges for gates and main building entry. You send audio and in some cases video into their exchange and then let it route and they have remote door/gate control. Then you can also send the video stream to your VMS as well. Granted, 2N's cameras are not that great, but it's a solid unit with good support now that Craig took over in the US and they are priced much better than Stentaphone which has a heavy dealer requirement.

Michael Miller

06/03/16 03:25pm

@Toni Alvarez Avigilon connects to the 2N unit and sees it as a camera. You then connect the SIP side of the intercom to your VOIP solution or do direct connection to a VOIP phone.

Ameen Abdul Khader

IPVMU Certified | 06/03/16 03:53pm

@ Brian: 2N camera resolution was limited to SD resolution until last year, but now they have camera with HD resolution, 120 FoV and built-in IR. Still, it is only IP 54 rated.

Ameen Abdul Khader

IPVMU Certified | 06/03/16 04:03pm

The model I am talking about is called Verso and I specified it for covered multi-storeyed car parking. But they have another model called Force, which is fully rated for outdoor use.

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