Convergint Acquisitions Reshaping Integrator Market

Author: IPVM Team, Published on Jan 24, 2018

The scale and number of Convergint's security integrator acquisitions are unprecedented.

In the past two years, Convergint has acquired 15 integrators at an IPVM estimated price of $400M+ USD, fueled by private equity partner KRG. Given their pace, we expect Convergint to be a $1 billion + company in the near future. But how will that change the industry?

Background: See our Competing Against Convergint post for integrator feedback on the company.

In this note, we examine the pace and impact of Convergint's acquisitions, provide feedback from Convergint executives, from key industry participants, concluding with an examination of what will happen both to the super-sized Convergint and to the rest of security integrators over the next 5 years.

*** ***** *** ****** ** **********'* ******** ********** ************ *** unprecedented.

** *** **** *** *****,************* ******** ** *********** ** ** **** ********* ***** ** $400M+ ***, ****** ********* ****** ******* ***.***** ***** ****, ** ****** ********** ** ** * $* billion + ******* ** *** **** ******. *** *** **** that ****** *** ********?

**********: *** ************ ******* ********** **** *** ********** ******** ** *** *******.

** **** ****, ** ******* *** **** *** ****** ** Convergint's ************, ******* ******** **** ********** **********, **** *** ******** participants, ********** **** ** *********** ** **** **** ****** **** to *** *****-***** ********** *** ** *** **** ** ******** integrators **** *** **** * *****.

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

18+ ************

***** ***'* ********** / *********, ********** *** ******** ** ***********, 15 ** **** ** *** **** ** ******. ************, **** have ******** * ******* *******,***** ******, **** *********** ** ***** ********** ****** ******* *** ****** a***** ******* **** ***** *** ***** ********. ***** *** ******* *** *** ********* ******* *** **** acquisition, **** **** ********* ******* ** ****** *********** **** ****** growth *** *************, ***** ********** ********* ***** ********* ** ****** at $***+ ** *******, ******* ** * ***** *********** ** $400M+ ** ***.

Approaching $** ** *****

***** *** ****** ** ******** ************, **** ******* ******, ********** was ******* ******* $*** ******* *******, **** ****** *** **** recent ************ *** **** ****** **** $* ******* ** ****** sales ****, ************ ** **** ******* ***** ******** ***********. **** makes **** ** ************* ***** *** ** *********** ********.

******:********** **** **** **** ** $* ******* ** ******* ** 2018, ****** **** ** ******* ****** *** ******* ************.

Many **** ***** ************

****** ********** *** **** ************* ************, *** ******** ** **********'* acquisitions **** **** ** ***** *******, ********* ** ******* ******* and ** **** ***** **** ******** ************ ** **** *********, as ***** ** *** *** *****.


More **** ***** *** ************* ************ ******

******** ************ **** ******* ********** ************* *********, ** **** ** more *********** ** *** ******* **** ** *** **, ********* to **********.

Not ******* *** *****-***** *********

**********'* ********** ******** **** **** *** *** ******* ** **** "roll **" **********, ** *** "***** *****" ********* **** ******* additional *********** ** **** *** ***** ** **** **** ********** branches. *******, **** **** *** ********* ********* ***** *********** **** a ****** ******** ** * ********** ****** ** ********. *********** with * ***** **** ** ********* ** *******, ******** ************** or **** *********** ******* ******* ********* **** ******** ** ********** they **** ** ** ********** ********* ** ***** *********.

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

******** ********* **** *** **** ******** **** ** ****** ***** the ***********, ******* ********** *** **** *** ******** ***** ****** in-tact, *** ****** **** ********* *** ********* *** **** ***** locations. **** ** ******* ** *** **** ************* *******, ***** acquired ********** *** ***** ******** **** ************* ** * *** to ****** ******** *** ******** *******. ****** **** ******** *** helped ********** **** * ********** ** * ********* ************ ** be ******** **, ***** ********* ********* ** *** **** ** fear ****** **** **** *** *********** ** *********.

Fallout ** ***** *********** ******

***** **** ********** ** *********** ******** ** ********** **** ********* had ******** ****** ** *** ***** ***** ******* **********, **** have **** **** **********'* ***** *********** **** *** **** ** frustrations. ** **********, **** **** **** **********'* ********** **** *** be *** ******* ** ********* ********* ** ***** ****** **** the ********* **** ** ******* *** ******** ********** **** **********'* systems *** *********. **** *** *** ** **** ********* ******* out ** *** **** ** **** ** **** *** ********** after *** *********** ******* *********.

Culture **********

********** ****** ********** ** ***** *******, **** ** ******** ** having *** *** *** ****** ********** *** *********, ** ********* by *** ** *** **-********:

********* ** **** ****** **** ***** **** **********'* ******* *** find ** ******* ********** ** *** *******. ** *** **** time, **** ** *** *********** **** **** ********* **** **** around **** ****** ** **** *********** ***** *** ******** *** traditions, ***** *** *** ****** ********* **** **** **********'*. **** sources ***** ** *** ******* **** *** ****** ******* *** a *** ******** *** * ******* ** **********'* ****, *** others **** ********* **** *** ******* ***** *********** *** ****** at *****. *********** * *** *** **** ******* ** ********* for *** ******* **** ***** **** * ***** ************ ***** all ********* *** *********** **** **** *****, ** * ******* growing *****-******** ************.

Non-Compete **********

** **** ** *** *********** *******, ****** ** *** ******** integrators *** ******** ** **** ***-******* ********** **** **********, ****** them **** ******** *** *********** ********* ***** *** ***********. ***** non-compete ********** *** **** **** *-**** *****, ***** ***** *********** keep ***** ************* / ********** **** **** ******** ***** *********** until *** *****.

Integrator ********* *******

** **** ****, **********'* *********** ***** ***** ******** *** ***** of *********** ********** ** *******, ** ***** ******* ******** ** security *********** ************ ***** ** ***** **********. *******, ******** ** have ******** ** **** ********** ** ****** ******* *********** ****** for ***** ********* ******* ** ************ *** ****** ** **** "bargains", ***** ***** ******** **********.

Difficult ** *******?

*******, *********** ** * ****** **** ******* **** **********, ** those ******* ** ****** **** * ****** ****** ** **********, may **** ** **** ********* ** ******* *** ****** ********* who *** ***** **********'* **** *** *****. ***** **** ***** not **** ** ********** ** ***** * ******* *********** ********, it *** ****** *** ***** *** ** *** ****** *************, limiting ****** ********* *** ***** *********** ***********.

Opportunity *** ******* ***********?

**********'* ************ **** ** ************* *** *** *********** ** **** a **** ** ***** *******. ***** ****** ********* *** ***** working **** * ***** ********** **** *** ******* ***** ************ globally, **** ********* ****** ** **** **** ***** ********* ***** they *** **** ******** **** ******** ******. **** ******* ** opportunity *** ** ********** ** **** *** ***** ** *** company ******** ** ********** ** *** ***** "*** ***". ************, the * **** ***-******** ****** ** *** ****** ** *** businesses ******** ** ********** **** *** ******* ********** ****** ***** competition ** *** **** **** ** ** ***** ******** ******* for *** **** * *****.

Exit - ***?

********** ********* ***** *** ** *****-**** ***** *** ** ****. When **** ** ***** **** ******, ** *** *** ** the **** ****** ****-**** ******* *** **********. ** ********* ***** look ** ****** ***** ********** *** **** ***** ******* *** within * *-** **** **** ****. **** *** ** **** by ******* ***** ********** ***** ** * ****** ** ****, selling *** ******* ** * ****** ************ ***** ** ***** be *************, ** ****** *** ******* ******. ** **********'* ****, the ******* ********* ** ****** ** **** ** *** ***** that **** * ******* ****** ** ** ***** ***** **** afford **, *** ****** *********** ********** ******, ****** * **** to ******* ** **** ********. ******* ** ** * ***** buyer ***** **** **** * *********** ******** ** *** ****, however ******* ******** ******, **** **, *********, ***, ***. **** either ****** *** ******** ********, ** *** *** ****** ** be ** * ******** ** *** * ******* ****** **********. This ****** ** *** ** * **** ****** *******.

Impact **** **** * *****?

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

**** ****: ********** ** **** ** ************ ******* *** ***** *** regional *********** ****** *** *****, ******** ************* ***** *** ********** that ** *********** / ******** ********** *** *****. **** ***** result ** * ************* ** ******** ***********, ******** *** *********** competitive *********** ** *** ******, ********** *** ********* ******** ***.

**** ****: ********** ********* ** ***** *** ***** *********** ***** ******* the ******* ** ***** *********. ***** **** ********, ************ ******** while **** ** ***** / ********** *** **** ** ****** satisfy ********* ** *** ****** *******, ******* ********** **** * Frankenstein **** *.*, ********** * *** ********** ** ******** ********** upstarts ** **** ** ******* *******.

** ******* ** ** *** ***** ** ** *******. *** key ******** ** **** *** ******* (*) *** **** ********** 'integrates' *** ***** *********** **** *** **** *** ***** *** (2) **** **** ** **** ******** ********** ******* *** ******* or *** **** ******* ***** ******** ******* *** **********.

*** ***** ** *******, ***** **** **** **** ******* ******** and ***** ****** *****, **** **** ****, *** ****** ** worse, * *********** ****** ** *** ******** *********** ********.

Vote / ****

Comments (11)

*** *** ***** **** ** ******* ** ***** ** ********** is ************* ** ************. ** *** ****** **** ************ ******** to *********** *** ******** ***** *** ******** ** ****-************ **** make ********* ** * ******** ** ****** *****, ********** ***** to ** ****.

*******, **** ********* *********** ******** ** *****. * ***** ******* shows **** (****'* ******* ** ************* **** ** *** ***).

** ** *****, ********** *** ***** ** ***** *** ** will ********** **** ** ***** * ** * ***** *** them ** **** *** *********** **** *** **. ***** ***, it's ***** ****** ** *** ********* *** ********** ** *** investors.

** **, *** ******* **** ******* *********** ** **** *********** is * ******* ********. ** ******* *** **** ** *** quality, ***** *** ***** ** *** ********** **** ****** (******* managers, **** ***** / ***, ***.) **** ** ********** *********** system ** *********. *** *******, * ** ** ** ****** integrator *** ****** ********** * **** ****** ********** *** **** local *** ******** ********, **** **** *** *****, *********** *****, etc. **** ** ** ***** *** *** ** ********, ****** specialists. **** **** ******** ****** **** ** **** *** * large ******* ********? ********* **** *** **** **** *****, **** greater ******* *** **** ******** *********** ** ***** **** ** smaller *****. *** *********** ************ ***** ** ******** **** ****?

** ***** *** *** ******** ********** ****** ** ******* **** a ******** ******** ** ****** (****) ** ******** * ******** overhaul ** *** *** *********** ********** **** ****** ** ******* building ******** ** ******* ***. **** **** **** ****** *********** to **** *** ****** ** ***** ******** *** ******* *** management ** *** *** ******** *** ******** **** ********* **** in * ******** *** ** ** ********** *** ** **** pilot.

** *** ********** ****** ***** *** **** * *** ********* that **** **** *** ****** *** ********* ******** ** ******** buyers **** **** *** *******. **** *** *** ***** ************* and ***** **** *** *** ***********

** ** **** *********** ****** *********** ** ******* (****) **** we *** ***** ** **** * *** **** ********* ** the *** ** ********** ************.

***** ******

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

****'* ** *********** ********. ** **** ** **** *** *** integrators **** *** ** ****** *** ***** ********, *** ** will *** ** **** *** * ******** ********** ** ***** the **** ***** *** ******** ** **** ** *** ********** systems. * ** ***** **** *** *** ********* *** ********* and ***** ***** ***** ********** ********** *********, *** * *** tell *** **** ********* **** ********** ********* *** **** ** work ** *** ******* *** ********* ***** *** **** ** able ** ** *** ****.

*** ********* **** *** ************ ** *** ******* ** ************ acquired ******** *** **** ******* *** ** ******** ** * corporate ***********. *********, *** ******** ******** *** **** ******** ** corporate *********** **** **** **** * ****-****** ***** ******** *******. In *****, * *** ** ****** *** **** * **** boat *** ** *** ***** *** *** ****** ****** **** on *** **** ** * ****** **** - ********** *** hulls ****** ** * ********** ***** **** * **** ****.

*** ******* ********** *** ********* ***** ***** ** ****** ********** into *** **** *** **** ** ********** ** * *********. Pull *** ********* ******* *** *** **** *** **** ****** would ** * ********* ** **** ** ***** ***** ** medium ********* **** **** ****** ******* **** ** ********* ** the ******* ************** ** **********. *********, **** ** *** ***** area ** ** ************.

*** ********** ** ** *****/*** *** ***/***** ************ **** **** is ******* **** ****** – ***** ******* **** ******. ******** in *** ** **** **** ********* *** ** *** ******* medium **** *********** ****** ** *** ****** *** ******** ** well ** * ***** ******** ****.

*** *** ************* ** *** /**** *** *** ************ *** inversion **** ********* ** ****** ** ******* ***** *** *** make **** **** ********* ** *** ******* ****. **** *** will *** ********** *** **** ******* ******** *** ******* ***** JCI / **** ******** ** *** ******* **** *** ********** side **** ******** *********.

**, ** *** **** ***** ********** **** *** ***** ** the ****** – *** * **** ***** ** ****** *** has ********** ********, **** *********** **** ****** ****** *************. **** price ** *** * ******** ****** *** * ******** ******** is **** **** ** **** ** ****.

**** **** *** ***** *** *** **** **** ** *** dominate ****** ** *** *********** ******. **** **** *** ***** on ** ***** ******* ** *** **** **** ** ****** rich - *** *** ***** *** *** ******* *******.

******* *** *** ****** ********* **** ******* ******* ***** ******. Below *** *** **** ********* **** ******* **** *** **** expect ******* ******* ********* ** ******* *** ******. ** *** aquired ********* *** ******* ** ******** ***** ********** **** *** only ****** **** ** *** ***** ******* ********* ********* ******* one *******.

********** **************, ** ********** ** ******.****** ********* ******* **** ****** *** ******* **********, **** **** **** $* ******* *** ** annual ******* *** ~** *********.

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

****** **** * ********** ******** ** *** *********** ********. ** offers ** ***** **** * ******* ******* * **** ****** integrator **** ** ********* ******* ********** *** *** ******* ** support *** ****** ********. ***** ** * ****** ******** ********* between *** *** *************. ****** *** **** * ******* *** Convergint **** **** ***** *** ******** *** *** ************ **** many ** *** ****** ********* ***.

******* ** ****'* ***** **'* *** * ******, *** ******* ********** **** *** ********* *** **** ** *****, * ***** * ****** ********** ** ** *** ******* to ******** ****?

****** **** ***** **** ******? ***** * ****** ***, ***** UTC ********** ***** ***** $* *******, *** ********** ** **** a ***** **** ****.

*'* **** **'* **** ******* *** ***** *******, *** ******* it *** ***** ****** ****** ****.

******: **** ******* *** **** ***** ** *** *** **********:*** *********** ******* *****, ***** ********** ******** ****?

********** *** ******** ******* **** ***** *********** ** **** *** says ** **** **** **** **** *** '********* ** *** ******** *** *********** **** ** ******', **** *** *********.

********* *** ** ***** “*************” ********** **** **** ** **-*** US ******** ******… ***** ******** ******* **-****** ******* ** ***** police. *** *******, *** ****** ******* ** ****** **** **-******** Response **** ****** ***. **** ** *** ** ** *** slow ** ** ****** ******** ** ******** ** ***** **** private ********** *****, **** ***, *****/*********** *** **********. *** “******” problem ** *** ** ***** ** *** ************ **** “***-**********” with ******** ** *********… *** ********* *** ******* ***** ********.

***, *** **** **** ****** ** **********? ***'** * *** of * ****** ****** *** **'* ***** * ******* ** emphasize *** ****** ******** ***** ** * ******* **** ** primarily ** ********** ********** *** ** ***** ********** ********.

****, ****** *** *********** *** “****** ******”. * **** **** stakeholders ***** ** *** ****.

*** ****... “…**'* ***** * ******* ** ********* *** ****** response ***** ** * ******* **** ** ********* ** ********** integrator *** ** ***** ********** ********.”

********** ******** *********** ****** ****** **********. *** *** **** “**********” ** ******** equally **********. ********** ** *** ** ***** *********. ***** *** new **** ** “****************” ******* **** *** **********. *** *** correct, ********** ** *** ***********,*** **** **********, ** *** *** *********** *** ** ** group ********** **** ***** ******** ********** *********** **** *** *** ASCMA/Monitronics.**** **** ** ******** ** **********, **** ******** ** *********. Even *** ************* ** **********, ***** **** ****** *** ******, recommend *** *********** ********* *** ****, ********* **** ******* ** country. ******* ******** ** ***** ******** *****… ** *** ** their ***** *** ******, *** ********** ***** ***********.

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