Avigilon Poison Pill Preps For Sale

By: John Honovich, Published on Jan 12, 2016

Avigilon soon may no longer be an independent company, but Avigilon's CEO is determined to control his own destiny.

After 2 years of punishing stock price falls and rapid management turnover, a weakened Avigilon has now implemented a plan to get the best out of any takeover or buyout.

In this note, we look what this means for Avigilon's current situation, the outlook for a sale and parallels to previous industry poison pills.

******** **** *** ** longer ** ** *********** company, *** ********'* *** is ********** ** ******* his *** *******.

***** * ***** *********** ***** ***** *******************************, * ******** ******** has *** *********** * plan ** *** *** best *** ** *** takeover ** ******.

** **** ****, ** look **** **** ***** for ********'* ******* *********, the ******* *** * sale *** ********* ** previous ******** ****** *****.

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

Poison **** / ***********'* ******

******** *** *** ** * ******** ****** ** ******** to *** * ******* over *** ******* ****** price *** ********. ***********, these *** ****** '******' that *** ******** ** shareholders **** *** **** buy **** ****** ** a *********** ******** ** a ******* ***** ** take-over ******** ******* ********'* consent. **** *********** ****** the ***** *** ******** has ** *** *** rewards ******** ************. 

******* ******** ****, **** *** **** we *** ****, ******* a ******* ***** ** ~50% *** ******* ********, in *** **** ** existing ************ ***** **** to *** ****** ** far ***** ****** ***** (the '******' *** *** hostile ********).

**** * ****** ***, we ******** ********'* ****** *********, ******* **** ******** would ****** ** ** bought *** ******* * substantial ******* *** **** plan **** ***** *********** acquirers to ** **.

Not *** ************ *** ****

****** **** ** ******** called * '***********'* ******' plan, *** *** ************ may ********** ** ** it ***** ***** ******* to ********'* ***** ** block ** ******** **** a ****** *********** *****. For *******, **** ************ may ** ***** **** a **% ******* *** this **** **** ******** block ****. ***/***, ** gives ******** ***** ******** on ********* ** ********* offers.

Bad **** *** ** **** **********

******** ***** ***** ** 2015 ********* ******* (*** yet ******** ********). ** the ******* **** *****, Avigilon ***** ****** *** have **** ****. ***** how **** **** *** stock **** (**** **** than **% **** *** peak), **** ***** ****** get * *** **** and * ******* ******** would ****** ***** **** anyway. **** **** ********* that ********'* ** ******'* are ****** ************ ** bad.

Killed ****** ******

********* / *********** / 'retirement' ** ********'* #* Schmode********** *** *** ** an *** *** ********. Schmode *** *** ****** heart ** * ***** growth *******, **** **** rocketed ******** ****** *** led ** *** ******** fallback. ******* *** *** the ******** ***** ********** either ***** ** ********, Avigilon ** *** ** a ***** ****. **** is **** ****** ***** the ******* **** ** the ****** ********* ***** manufacturer ** *** ****** market.

**** **** ** **** seen ****-*******, ******** *** become * ******, **** reasonable ************, ***** ** good, *** ** ** not *** *** **** to ******* *** ***** effort ** ****** ******** that ******** *** ****** the **** ** ********* days. ***, ** ********, with *** ** ********* largely ****, ******** ** now ****** ** ***** to **** **** *********, which ** *** ****** nor ** *********** ********* as ***** ******** ********. Moreover, *** *****, ********** and **** ** **** Schmode's ********** ***** *** the ***** **** ******* impacts *** *******.

Price *** ********

********'* ******* ****** ************** is ~$*** ******* *** or $*** ******* ***. Compared ** ****'* ******* of ~$*** *******, ***** to ***** ***** ** now * ****** *.* / *, **** ** way **** **** ********'* peak ****** ** ***** ratio ** ~* / 1.

*** **** **** *** Avigilon ** **** *** company ** ********** '*****' compared ** **** ** used ** ****. *** bad **** ** ******* growth *****, ***** ******* profits, *** ********** ********, the ******** *************** ******* to **** ******** **** attractive. *** ***** ********* is ****** ******* ********* who *** ****** ** pay $***+ ******* *** for *** ***** ************ company.

Paying *** '****'

**** ********'* ****** *** at ~$*** ******* *** and *** ****** **** forcing * *********** *******, we ***** ****** ******** to **** *** ** acquisition ***** ** $***+ million.

Parallel - ***** ********

******* ******** ***** ************ company,***** ********, ****** * shareholder's ***** / ****** plan, ** ****** ******* about ***** ********* **** off, * ****** ****** they **** ********* ************ ********. *** ********** **** similar ** **** **** (falling ***** *****, ************ investors, ***.) ****** *****'* acquisition ** ~$*** ******* was **** ******* **** Avigilon *** * *** easier *** ** ******** to ***.

Takeover / ******** *** ********?

** ********'* ******* ***** price, **** **** *** pill ** *****, ** might ** * ********** bet *** * ******* to ******* ****. ***** are **** ******** ******:

  • *** '****' *** ** end ******** ** *** of *** *** ** end ********* (******* ***** / **** / ********* out ** **** ***** that **** *** *** but***********).
  • ****** ***** ********* **** the *********** ****** *********
  • ****** ******* ***** **** many ***** ******** / dealers
  • **** **** ********* *** could ** **-********* **** a *** *** / better *******

** * *** *********** / company, *** ** * takeover ***** ** **** than * ***** **** year's *****, ******** ***** reasonably *** **** *** ****** and ****** **** * profitable ****** *******.

Comments (11)

Hmmm. I wonder what Manufacturer has a boat load of cash to spend, and could really use the built in customer base Avigilon would give them in the mid to high end? Someone from Mainland China maybe?

Some disclosure - used to work there, now for a competitor.

Someone from Mainland China maybe?

Hikvigilon?

I don't think either of the big 2 are very likely, but I suspect Dahua would make more sense, since they are increasingly far behind in the US yet have a market capitalization of over $5 billion and, therefore, are big enough to justify it.

Perhaps Avigilon could get Dahua and Hikvision into a bidding war!

Considering that Hik is the biggest camera manufacturer in the world, and to my knowledge all their IP cameras come with at least some analytics, their AV/OV license fee at some point becomes more than a rounding error.

If the price was right, elimination of that surcharge would be an added incentive to acquire.

Possibly even greater reason would be that Dahua, AFAIK, has no agreement with AV/OV.

Ouch!

Depends what Hikvision agreed to pay OV for analytics. But looking at the money OV made on patents (disclosed here), Hikvision is evidently not paying that much, considering they are selling millions of cameras but OV / Avigilon has not made that much money.

Maybe not a deal maker, but just a deal sweetner.

And a spoon full of sugar helps the medicine poison pill go down.

Do not think it can be a Hik or Dahua. Maybe it can be Sony with the idea to push their imagers and give a new life for their video surveillance business.

My guess is that Sony will be out of the surveillance business in the next few years. I don't think that they will invest anything significant in this business.

Just my own personal speculation.

It won't be Hik or Dahua or Sony or Canon or FLIR or any of the other name-brands in the security market.

The security market is now very rapidly evolving, and colliding with the IoT movement and hardware-focused mini startups. Much like the presidential primaries, or a game of kick-ball, all the candidates are in the open, all the teams have picked their major players. Yeah, there's a few stragglers out there that might still get picked up or blended into something larger. Companies like ISONAS are a good example here, they have a strong product, it's a bit niche, and they'd benefit from a better brand and larger sales force. But, we're unlikely to see more acquisitions on the scale of what it would take to buy Avigilon from existing players.

Avigilon will get bought by some name-brand, domestic or international, that wants to take their "expertise and business acumen" and make a strong play in the security market. Cisco is probably the top of my list. Historically Cisco has expanded their product portfolio by purchasing fully-formed companies and products, dropping ios (the other ios) on them, and putting a green bezel on the front. They've already tried to do this in the security market, but I think the products they got didn't live up to the "fully formed" part. Avigilon would give them a turn-key play with a lot of the kinds of things that Cisco would like (analytics! 30MP cameras!).

Dell could be a candidate, Avigilon is already a huge Dell OEMer, and Dell has been sniffing around other businesses for a while. I don't think this would be a successful merger, but on a slide deck you could probably make it seem like the best thing in the world.

Microsoft is another company that has been dabbling in different sectors for a long time, and under their new leadership they've been trying to expand their reach into more devices. Imagine ACC Lite as a core component of every Windows 11 platform, already installed, just add a camera or two to your network. You could drive sales up 5x overnight. MS has also been dabbling in more of their own direct hardware manufacturing, and Avigilon has two very nice state-of-the-art facilities in North America.

The other angle is the Private Equity groups, buy the company, squeeze out the overhead, silk-screen the brand on as much stuff as possible. Drive the stock up 8x over a couple of years and then dump it off on some unsuspecting company wanting to break or diversify into security at the time.

All this of course assuming that Avigilon actually fears or intends to get bought. This might also just be the company reassuring investors that if something were to happen they won't be left empty-handed. A bit of insurance in a sense.

Imagine ACC Lite as a core component of every Windows 11 platform...

Related: Why Doesnt Microsoft Have A VMS?

Psst...Hanwha...over here. Wanna buy a VMS? You can call it SamsTechwIlon....

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Knightscope Sells Just 1 Net New Robot In 6 Months on Oct 04, 2019
For the first half of 2019, US government records show that Knightscope has sold just 1 net new robots ('machines-in-network'), inching up from 52...
Critiquing Carnegie's AI Surveillance Paper on Sep 25, 2019
The Carnegie Endowment has issued an ambitious paper on the Global Expansion of AI Surveillance. While its aim is applaudable, the paper has...
RealNetworks SAFR Facial Recognition Profile on Sep 25, 2019
RealNetworks entered the surveillance market by giving away their analytics to schools for free, and is now targeting large commercial users with...
Directory of 70 Video Surveillance Startups on Sep 18, 2019
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known. 2019...
Schmode is Back, Aims To Turn Boulder AI Into Giant on Sep 16, 2019
One of the most influential and controversial executives in the past decade is back. Bryan Schmode ascended and drove the hypergrowth of Avigilon...
ASIS GSX 2019 Final Show Report on Sep 12, 2019
IPVM went to Chicago for ASIS GSX 2019, with many exhibitors disappointed about traffic and the exhibitor schedule changing next year. However,...
US Government Ban of Dahua, Hikvision, Huawei Takes Effect Now on Aug 13, 2019
The 'prohibition on use or procurement' of Dahua, Hikvision and Huawei products and 'essential components' take effect today, August 13, 2019, one...
Proactive CCTV "Only Affordable Video Archiving Solution" Profile on Aug 12, 2019
Proactive CCTV is claiming to offer "the only affordable video archiving solution on the market", reducing the storage typically required for H.265...
Stanley Makes "Multi-Million Dollar Investment" Into Banned Hikvision Products on Aug 09, 2019
Just days from the US government ban going into effect, US mega-corporation Stanley has dramatically increased its imports of banned Hikvision...
Dahua, Hikvision, Huawei US Ban Rules Released on Aug 08, 2019
The US government has released rules on how the 2018 NDAA ban of Dahua, Hikvision, and Huawei will be implemented when it takes effect in 5...

Most Recent Industry Reports

US DoD Comments on Huawei, Hikvision, Dahua Cyber Security Concerns on Oct 16, 2019
A senior DoD official said the US is "concerned" with the cybersecurity of Hikvision, Dahua, and Huawei due to "CCP" (China Communist Party)...
Pelco Sarix Pro3 Camera Tested on Oct 16, 2019
Pelco has released their Sarix Professional Series 3 cameras, claiming "more security detail in challenging scenes with excellent low light and...
IPVM Camera Calculator User Manual / Guide on Oct 16, 2019
Learn how to use the IPVM Camera Calculator. The guide below includes instructions, images, gifs, and videos demonstrating and explaining the...
Altronix Claims Tango 'Eliminates Electricians' on Oct 15, 2019
Power supply provider Altronix claims its new Tango power supply 'eliminates the need for an electrician, dedicated conduit and wire runs'. In...
Pelco CEO Out, Seeking New Industry CEO, New CEO Found on Oct 15, 2019
Just 2 months after Pelco was sold, Pelco's CEO is out, with Pelco bringing in an outside President and searching for a new CEO from the industry,...
Hikvision Dissolves North American Business Unit, Splits Canada and USA on Oct 15, 2019
Hikvision has dissolved its North American Business Unit, splitting up US and Canada operations as the PRC-government owned manufacturer faces...
Camera Focusing Tutorial on Oct 14, 2019
Camera focus is fundamental to quality imaging. Mistakes can significantly reduce details, making cameras less effective. In this guide, we...
"UL Has Blood On Their Hands" Alleges The Interceptor / Keith Jentoft on Oct 14, 2019
"UL has blood on their hands" alleges Keith Jentoft of "The Interceptor Project". We examined The Interceptor in-depth last year, see: The...
Access Control Course Fall 2019 - Last Chance on Oct 14, 2019
Register Now - Fall 2019 Access Control Course. Thursday, October 17th is the last day to register. IPVM offers the most comprehensive access...
Axis HD Analog Encoder Tested on Oct 11, 2019
Two years after declaring "Everything is IP", Axis has released their first HD analog encoder, the P7304, with support for AHD, CVI, TVI, and SD...