HID Buys Mercury Security

Author: Brian Rhodes, Published on Sep 19, 2017

One of the biggest access control deals in years.

Mercury Security, the most widely used access hardware OEM, and partner to 20+ manufacturers, has been purchased by Assa Abloy / HID Global.

In this note, we examine:

  • The Deal Rationale
  • Price and Valuation Estimates
  • Why Mercury's Vendor Neutrality Key
  • Profile of seller - ACRE
  • Detailed response from ACRE CEO
  • Analysis of value to HID
  • Why Partners are relatively relieved about this outcome
  • Risks to Mercury about HID's control

*** ** *** ******* ****** ******* ***** ** *****.

******* ********, *** **** ****** **** ****** ******** ***, ********** ** **+ *************,*** **** ********* ** **** ***** / *** ******.

** **** ****, ** *******:

  • *** **** *********
  • ***** *** ********* *********
  • *** *******'* ****** ********** ***
  • ******* ** ****** - ****
  • ******** ******** **** **** ***
  • ******** ** ***** ** ***
  • *** ******** *** ********** ******** ***** **** *******
  • ***** ** ******* ***** ***'* *******

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

Deal *********

***'* **** ** ****** ******* ** ********** *** ********* ** their ******** *** ***** *********** ********. ***** ******* * *** access ****** ** **** ** *** *********** *** ******* ******** side, ****** ******* ***** *** *** **, ** *** *** most, *********** *** ******* ******* ** *** ****** ********** ******** market ** ****.

Price / *********

**** ********* **** ****** **** $*** - $*** ******* *** for ******* ******** [****** - **** ** *****, *** ***]. This ** ***** ** *** *********:

  • **** ********* $** ******* *** **** ******* *** ******* ******** and **** ******* *** "**** **** ******" *** **** "*** acquisition **** ** ********* ** ***"
  • ****'* **** ****** ** ~**% *** ***** ****** ********* ** ~2.3x ***** *******.
  • ***** ****'* ********** ** *******'* ******** **********, ** ***** ****** a ******** ***** ** ** ***** *.** *******'* ******* ** to * ******* ** ~** *******, ***** ******** * $*** - $*** ******* ******** ***** ********.

[******: **** ****** **** ~$*** ******* *** *******, ********* ** sources ***** ** *** *******, ****** *** ****** ******** ** Mercury (*.*., ***** *** **** *********** ****** ******* ***** ******** and *** ***** ** ******** / **********) *** *** ********* value ** ***.]

*******'* *******, ******** ** *** ******** ******** (*** ****'* ******* *********), ** *** **** ****. *******, ******** ** *******'* ******* quiet ****** *** ****** ********, ** ****** ***********. ********, ** also ******* *******'* ************* ** ** ***** ******, **** ***** on ****'* ******** *** *******'* ****** ******** ** *** *****.

Mercury's ****** ********** ***

******* ********'* ******** ** ****** ****** ******** ********** ** ******** Access ******* *******, *** ********* ***** ** ******** *********** / management *******.

* *** ******* **** ** **** ********* ****** ******* ***** resell *** **** ******* ******** ******* ***** ***** *** ******. Because ******* **** *** ****** ** *** ******, **** ***-***** are ******* **** ******* ***** **** ***** ****** ****** ** responsible *** *** ****** *** *********** ** ***** *****. ******, more **** ** ********** ****** ******* ******* (********* *****, **, Honeywell ********, ***, ****, *** **** *******) ********* **** *** same ******* ******** ********,***** *** ******* ***** ** ** '****' ************ **** ** more **** * ******* ****** ***********.

***** *** ****** ***** *********** *** ***** ***** ** ********* access ***********, ******* ***** *** *********** ******** ******** ** ******* manufactured ******* **** ****** ********* ********* ***** ***** *****. ********** partner ******* **** ******** **** ****** ********* ** *****, ***** direct ******* ****** *** ************* ***** *** *******. ******* **** this '***' *******, ******* *** ******** ****** ******* ***** *** company *** ****** ** *** ***** ****'*.

Seller **** *******

******* *** ********** ***** ****** ***, ******* ** **** **** -*** ***** ****** **** ****** (****), ****** ** ********* *** *** ******, *** ******** ******* ******** ** *** ****.

******* ********* ** *** ****** ******** **** **** ****** ******* with *** ****** ** ****, **** * ***** ** ********** the ******** *********** ******* *** *********** ******** ******** ****** **** pivot ** ********** ******.

** *** **** **** ***** *******, *** ******* *********** *** been *****, **** *** **** ******* ******* ****** ******** ***** ******** **********, *** ** ***** ********* ** ******* ** ********** ********** and ********* ****** *******.

ACRE *** ***********

**** *** *** ****** ********* *** **** ** ****, ****** that *******'* ******** ***** ******** **** *** **** ** ***** portfolio, *** **** **** **** ** ***** ** *** ********* of ****** *** **********, ********* ********* ************ ************* ** ****:

*** ******** *** * ********* **** *** ****. *** **** that ** **** **** ** ****** ******* ** * ******* that ** * *****, ****-**** ********** ******* ** **** ***** this * ***-*** *** *** ********* ********. ** **** ******** our ***** ************ **** *** ****** ** * ********** ******* and **** *********** ******* **** ************, ***** *** ******** ******* Security, **** ******** ** ****. ******* *** **** * **********, good ******* ** *** **** ******; *******,Mercury ******** ***** * **** ********* ******** ***** **** *** ***** ********* ** *** ********* ** ** *** ********. This sale is the next step for ACRE that aligns with the overall strategy of building a security company around our core businesses and brands. In looking to further expand the ACRE family of companies, Vanderbilt will continue to focus and build on the strengths of their video, access and intrusion portfolios. In addition, ComNet will continue its focus on building both geographically and across new vertical markets such as Power Transmission and Distribution. The ********* ********* ******* ****** *** ********** *** ****** ********* *** ******** ** ****** and we will further explore the compliments in technology that span both organizations. With that said, ACRE **** ******** ** **** *** ************ **** *** ************* ** *** ********** *** ****** ********** with similar business structures, customers and channels to market. [Emphasis IPVM]

Good *** *** ***

******** ******** ** **** ** **** *** *** ** * strong **** ******* *****/*** ******, *** *********** **** ** ******* *********** ********* ** *** physical ****** ******.

*** *** **** *** ** *** ******* ********* ** ****** credentials *** ******* *** ******* *******, **** *********** *********** *** credentials *** ******* ** **** ** *** **** ******* ** Mercury ******** ***** ********** ********. **** ** ****** ******** ***** of ****, ***'* *********** ***** ***** ****** *********** *** ********* backing ** *******, *** ****** *********** *********** ** *** ***** controller ******** ** ***.

Already *** ***** ******** ******

*** ** *** ********* ****** *** ****** ** *** *** is ** *********** ********** *** ********** ** * *** ***** controller ******. ***'* ******** ********** *****,**** ****************** *** ****** ********* ** ****** ******** *******, *** *** Mercury *********** **** ******* *** ********.

** ***** ** ******* ** *** ** ******* ****** ***************, *** *** ********* ***** ****** **** ******* ******** **** each *****:

** **** ****, ** ** ******* ** *** **** ***** to **** *** ****** ** *********** *********. *******, ***** *** exclusive *********** ** ******* ******** **** **** ******* ********, ** seems ******** **** *** ******* ** *******'* ********* **** ** made *******.

Neutral **** *** ********

** **** *** ** ***'* ******** ****** **********, **** ******** sources ** ***** **** ********* ******* ** ***** ******** ******* for ******* ** *** ***** *******.

***** **** *** *** ******** ******* ** ***** *** ******** tied ** **** *** **** ********, *** *********** ** *** will **** ** ******** ******** ************* *** ******* ******* ****** than ***** ****** **** *******.

Relief *** *** ** *********

*******, ******** ******** ********* ****** ** **** **** ******* *** not **** ** * ************ ********** **** *** ** ********* Electric.

****** *** *********** ** *******'* **** **** ********* *** ******* years. **** *** ***** *********** ******** ****** ** *****************, ******* **** *** ****** ************ ** ****** ***** ***** buy, *** ********** ******** ****** **, ******* ******** ** ********* partners *** **********.

*** **** **** *** **** *** ****** ******* *** *** access ********** ******** ** **** ** '*****' *** ******** ********, regardless ** *** *** ******** ** ************ *******.

Risk **** *** *********** *** ************

*******, *** *** * ******* ****** ** ********** *** **** dramatically ************* ** ******** ** ********** ***** ***********. ** ****** years, *** *** ********* ********* **** ********** ***************** ******* ********** ******** ******************, **** ** *********** **** *** ******* ******** **** ***, closing **** ******** ******* *** ********** ** *********** ******* *********.

***** *********** ********* ****** ** ******* ** ****** *** ******** HID ********* ********** *********, *** **** ** *************, **********, ** substantial ********** ** ******* ** ** *********** ******** **** *** unclear.

*** *** *********** ******** ******** *** *** ******** ********, ******** closing **** ******* ******** ******* ****** ** ********** ** ******, Texas *** * ****** ** ******* ** *** *********** ******** that ********** ******** ** *** ************** ******.

****

Comments (21)

* ****** **** **** ****** ** *** **** ** ****? The ***** ********* ** *** *********, ***** *****, ** *** have ****** *** **** ******** ******** ** *** ******** ** Mercury ****.

**** **** ** **** ****, **** **** ******* *****-******* / co-marketing ** ***** ******* ********* ** ** *** **** ***** that *** ****** ***** ******** ** *** *************. ***/**?

*** ******* * *** ** ******* **** **** **** *** profits *** **** ****** *** ****** ** ***** ****** *********? i.e., ****** *** *******.

*** ***** **** **** **, ******* ****** ***** **** ************* in **** ****** ******* ******** ********* ** *** ******. ********** while ******* ***** *** ***** ***** **** *** *****.

* *** ******* ** *** ********* *** ****** ** *** they **** ** :)

** ****** *** ******* ****** ******* ** *** **** ***** especially ***** ********* ** *** ** *** **** **** ****** opportunity ** ****** **** ** **** **** ** *** *****.

**** ***** ***** **** *** *** ******* ********** ********, ** which **** **** ******* *********** ************?

* ***** ***** **** ****** *** "*" ****** (*********). * doubt **** *** ***** ***** ********.

**, *** **. *'** **** *** ***** **** *** ** my *****. ******.

** ************* ** ***** **** ***, ******** **** ******* **.

*********:

*** *********, ********* **** **, ******** *** *******, ***** **** summer ** ***** ************ ******* ******* ****** ******* ******** *****. That ******* ******* ****** ** ******** *** ********* ************.

***** ***** ** *** ********* **** *** ********, ******* **** it ******* **** ***** *** ******* ******** **** ****** ********** “for ** ***** **-**** ***** *** ******** *** * *** longer.”

************, *****’* **** **** ******** ** ** ********* ** *******. And ***** ***** **** *** ******** ***** ** ****** ***** Universal’s *** (****) ******** ** **** **** ******* ****** (***-***, LNL-2210, *** **** *** ***-****), ***** *** ******* **** ******** to ******* *** ************* ** ***** ******** *** ***** *** installed **** ****** *** ********* ** *** *** ******** ******* on ******** ***** **** *** *********.

*** ****** ******* ** **** *** *******, *** *** *** users. *** **** ** ***** *********** ** *******.

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

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

*** *** ********* *** **** ******* ** *******? ******* ** 'open ********' *** ** ** *** '**** ******'. * ***** be ******* *** **********. ******.

***** - **** ********, ********. ******** **** *** ********* *** policy ** *** ******** *** *** *********** ***-**-*** ****** *** offers ***** ****** ** **** ** *** **** ******** **********, this ** **** **** **** *** *** ********. **** ****** control ***, **********,******** ******* ********* **** *** **** ******** ********** that ** ************ *** **** **** ******* *** ******* ********* from. ******* **** **** **** **** **** ****** ****** **** end.

*** ** ** "**********" **** **** ****** ******* *** **** insulated **** *** **** ********** ** ** ************? ** ** a ******* ********* ******** **** *****:

** ** * *** **** ******* ** ******* ****** ******* on * **** **** ** ** ** **** * ****** on * **** ** * *******. ***** *** ****** *****, etc., *** ** ******* **** ******** *********** **********. ** * ****** *****, **** *** ********* **** it, *** *** ****** ***** *** ********* *****. * **** fails *** ****** **** ** ****** **, *****.

****, *** *** ******** ***** ** ****** ******* ** ******* based ** ************ ******* ***** **** ******** ***** *******. **** requires ******* **********, ***** ** **** ****** ** ** **** a ************, **** ****** *******.

****** *** ** *** * ********** ********* ******** - *****, intrusion *** ************ *** **** ***** *** ******** *********** ********. End ***** ****** ***** ******* ** *****-*******, ** **** *** most ***** ********* *** ************ ** * ******** ***** ****** their *************. ** *** ***** *** ** **** ********, ******, remains ****** *** ** *** *** *********** ***** **** ******* options *** ***********, **** ***** *** ****** ********.

** **** ****** ******* ************* ***'* ***** ****** ** *** direction ** ***** ******** ********** *****, **** ******, **** ** the **** ******** *** ********** **** ***** ***** ** *** them ( ******* ****).

* ***** **** *** ****** **** **** ****** *** * higher ******* **** *** **** *** ***-****. *** ** *** as ***********, ***** *** ******* ***** ********* ****** ***** **** platform ******** **** ** ********** ******** - ***, ***, ********, Mercury, ***. **** ******** *** ** ****** **** ** **** platform ******** ******** **** ************ **** ** ******* ******** ******** and ********** *** ********* *********** **** ******* ******* ****** **** locking *** ******** ** ******* *********** ******** *****. **** ******** has ****** ** *** ***** ******* ** *** ********. **** is *** * *** ** ** "**********" **** ****** *** held *** *** ** ****.

**** *** *** ****** ********* *** **** ** ****, ****** that *******'* ******** ***** ******** **** *** **** ** ***** portfolio, *** **** **** **** ** ***** ** *** ********* of ****** *** **********, ********* ********* ************ ************* ** ****:

*** ******** *** * ********* **** *** ****. *** **** that ** **** **** ** ****** ******* ** * ******* that ** * *****, ****-**** ********** ******* ** **** ***** this * ***-*** *** *** ********* ********. ** **** ******** our ***** ************ **** *** ****** ** * ********** ******* and **** *********** ******* **** ************, ***** *** ******** ******* Security, **** ******** ** ****. ******* *** **** * **********, good ******* ** *** **** ******; *******,Mercury ******** ***** * **** ********* ******** ***** **** *** ***** ********* ** *** ********* ** ** *** ********. This sale is the next step for ACRE that aligns with the overall strategy of building a security company around our core businesses and brands. In looking to further expand the ACRE family of companies, Vanderbilt will continue to focus and build on the strengths of their video, access and intrusion portfolios. In addition, ComNet will continue its focus on building both geographically and across new vertical markets such as Power Transmission and Distribution.The ********* ********* ******* ****** *** ********** *** ****** ********* *** ******** ** ********* ** **** ******* ******* *** *********** ** ********** **** span **** *************. **** **** ****,ACRE **** ******** ** **** *** ************ **** *** ************* ** *** ********** *** ****** ************** ******* ******** **********, ********* *** ******** ** ******. [******** IPVM]

* **** **** ***** *** *** ******** **** *********** ******** from ******* ** *** *** *********** ***** ** *** ******** Authentication ****** **** *** *** ***. *** *** ******** ****'* great **** **** ****** ** **** **** ****** *** **** though ********* ******** *** * ***** ***********, ** ***** *** scholars ****** *** ********, "*** ***'* ****** * ****." * have ***** **** *** *** ******* * ** ****** ****, but *** **** ****** *** **.

**** *** **** *** ***-**-***** (** ***** ************** ** *** EP4502)? ** **** ********, *** ********* ******** **** ** *** Mercury ***** ******.

** *** ******* **** ** ** *** ****** *** *******, but **** *** ******** ** * ******* **** *** ***** it ** **** *** ** *** *** *** ** *** is **** ******** *** *** ** *****. ** **** *** a *** ****** ************* ***** ** ********* **** ***** ** avoid *** *** *********, *** *** ******** ** ******* ** Enterprise ******** ** **** *** ******/********* ** ****** ***** ******* to ***** *** *** ** **** *** ******. ***** ***** has ******* **** ****** **** *** *** **** ** **** continue ** ** * ******* ***, *** **** **** ***** are ***** ******** **** *** ******** *******. *** **** **** HID **** *** *********, ** *** ******* **** ***** **** they **** **** **** **** ********* ************. **** **** * letter **** ******* ****** *** **** *** **** ***** ** add ***** *** *** ***** ******* ********* ******* *** *** and *** ****** ** ****** ***** ***** **** ***** * volts, *** ***** ************ ***** ***** ******** *** ******* ** be ******* ** *** ***, **** ** ******* ** * voltage *********. * ** **** ***** ******* **** ****'* **** this **** ** ********* ****** ******* ******. ***** ** ** that ** **** **** **** ** * ******* **** ***** have ************ *** ******* ********* **** ****** *** *** ** better *** *** ******** *******. * ***** **** ** *** a **** ** ********* *** **** ********* **** ** ******* notes.

"**** ** * *** *****, **** *** **** *'* **
*'* ** ******** *** *** * ******* ** ***.
***** '**** * *******"

-**** *******

***. *** ******** *** ******.

**** * *** *** *********** ** ********** *** ******* * was ********** **** **** *** ********** ** **** * ********** for ***** *** *************.

******: **** ****** **** ~$*** ******* *** *******, ********* ** sources ***** ** *** *******, ****** *** ****** ******** ** Mercury (*.*., ***** *** **** *********** ****** ******* ***** ******** and *** ***** ** ******** / **********) *** *** ********* value ** ***.

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