Identiv Sells Off Physical Access Control Business To French Provider Vitaprotech
In a $145 million deal, US access control provider Identiv is selling off its physical access control business to a French company, Vitaprotech, which may not be well known now but is aggressively expanding.
In this note, based on attending the company's investor call for the deal, IPVM examines the rationale for both sides and the challenges they face going forward.
******* ***** *******:******* ********* ***** ******** ********* **** Security ********* ******** *********** *** $*** Million
Executive *******
*** **** ********* ******* ** **** deal ** ************* *** ********** **-************************ ** ** ** ** ******* an *&* ********. *******, *** ******* challenge ** *** ** ****, **** the ********* ** ********* ***** *******, *** **** *********** ****** ***** disparate *********? ******* *** **** ******* itself, *** **** ** *** ** view * $*** ******* *********** ***** as * **** ******* *** *******.
Vitaprotech **********
** ***********'* ** **** *********** *********, *** *******, **** ****** ********* Identiv's ******, *** ******** ******** *********:
***** **** *** ***** *** ************* scaled **** €*** ******** ** €*** in ****, ****** ** * ***** organic ****** *** ** ****** *** and ***** ********, **** ***** ************ completed ** ********* *** *********** ******** in ****** ******* *** ***** *** Smart ***** *******.
***** ** * **** ** *** brands/companies **** ** ***********:
***** ** *** *******'* ********** **** the ** ****:
*** ******* ****** **** *** **** $37 ******* ** ****** ******* ** Vitaprotech, ***** ***** ** * *********** increase **** *** ********* **** *******.
More *&*
***********'* ***** ** ***** ***** *** they "****** ** ****** *****," **** M&A **** ** **** ******* ****:
****** ********* ** **transform *********** into a leading coherent electronic security solutions platform in Europe through accelerated *&* and continued focus on high value-added software. [emphasis added]
Identiv ******
******* ****** ** *** ****** ** a ********** ** ************, ********* ******, which *********** ******* *** ******* *** decades ***, *** **** ********,*** ** *** ***** ********** *************** *** ***** ****** *******.
Selling ** *.** ******* ********
*** **** ***** ** $*** ******* represents ************* *.** ** *** ******* of *** ******** ****** ******* ****** that's ***** ****. **** ** * good **** ***** ***** *** ******* now ****** ** ~$*** ******* *** had ~$*** ******* ** ****** ******* in ****.
*** ******* **** ***** ********* ****** ****** ****** *** **** **** *** ****** being **** ********** **% ** *******'* full-year **** *******:
[*** ****** ***** **** ** ***] security ******** ***** ** ******** ********, access ****, ******** ****** **********, *** the ****** ********** **** ***** ** well ** ******. **** ********* ***** 32% ** *** **** ****** **** be ****, ***** ******** ******* **% of *** ** ** ******* ** the ***** *******.
*********, *******, *** ********** **** **** deal, **** *** ***** ******* **** than **% ** *** **** *******:
** ******* *** ***** ** **** stock **** ** * **** ** confidence ** *******'* *** ********, ** Identiv ********* * ******* ******* *** selling **** * ***** ** *** business.
*** **** ******* ** *******'* **********, the ******* **** *** ****-**** **** revenue *** $***.* *******, **** $**.* million ****** **** ********, *** ******* the ******** ****** ******* ****** ****'* being **** ***** *****:
******* *** ****** **** **** *** $116.4 *******, * *% ******** **** $112.9 ******* ** ****** **** ****. By *******, ******* ******** **** $**.* million, *** ******** ******** **** $**.* million.
CEO ****** ********* ******* ***********
******* *** ****** ********* **** **** Vitaprotech ***** **** *** **** ** the ******** ****** ******* ********, *** company**** ** *** ***** ******* ** the ****:
**** *******, ******* ****** ********** **** join ***********, ********* ******* ********* *********, ** ***** **** ******** **************** ************ ****** *** **** ** *** of *******.
*** *******'* ******** ** *** *****,***** ******, ******* ********* ** **** ** the ******** ****:
*** ******* *** ***** ********* *** other ********** ** *** ******** ******** will ** ******* *** ***** ** the ******* ****.******* ********, *** **** ** ********* up ***** *** ***** [** *** transaction], **** **** ****** *** *** of *******.
*** *** ********* *** ******** ***,******* ************ ********** ***** ** ***** ********, a ***** **** *** *** ************, the **** ******* ** *** ***** to ***** ** **** *** ********* business, ** *** ******** *****:
Identiv ** *** **** ******** ** ************
******* **** ** ***** ** *** the ******** **** *** **** ** both ******* ****** *** ************ ** its ***** *******:
*** ******** **** *** **** **** significantly ********** *******’* ********* ********, ********** capital **fund future organic and inorganic ****** of its specialty IoT solutions business. [emphasis added]
******** ***** ****** ******* ********* ** Identiv's *********** ***** ***** *******, ****** that *** ******* **** ***** ** growing *********** *** ********* ************ **** acquisitions *** **** ******* *** *** leader ********'* ********* **** ****** ***** decisions:
*******************,or ************,*****************************************************.**'************************* *********************,*****************************************.************************************************************************************.
********************************,*****************.**'*****************************************************,**********,*********************,****************************************************************************,****************************.
[of *** ********] ****.********************,******************************************? [******** *****]
****** ***** **** **** ** *** acquisition ******* *** "**** ********" *** further ********** ** *** ******** ** announcing *******:
*********,*'*************** **************************** **********,*************************'***********.****'**************,************************.
*****************************************************************,*************************,*************. **'** ** ******* ** *** about ***** **** ****.In ** **, **'** ** ******* ** ***** *************. [emphasis added]
Identiv ** ***** ** ********** ***; ******** & ********* *******
******* ***** *** ********* ******** * "New *******," *** ******** ****** ******* explained **** ** ****:
We're ******* [**] * *** *******, will be focused on IoT solutions and will be their total commitment in the marketplace. We're ***** ** ** ******** *** *** *********, **** *****-*****, ****-****** ***** ** ********* that we we know we can take to the marketplace. [Emphasis added]
******* ** ***** ** ***** *** remaining *** ******** ** *** ********** sector, ****** **** ******* ** ***** areas ***** ****** *****-*****, ****** ****** and **** *** ******* ** ******** down ** ******** ********* *** ******* recurring *******:
**'** ***** ** ********* ***** *** energies ** *** ******** *** ******* high-add ************* ***** ** *** ******* a ****-***** ******** *** **'** ** embedding *** ******** *** ******** ************ to *** ******* ****.
**'** ******* ****, *** ** *****'* had *** ********* *** ********* *********** to ** **** *******. **** **** change ** *****we **** * *********** ******** *** ******* ********** **** *** ******** ******* *********** *********** ******* *** *** ******** ****. [Emphasis added]
*** ******* ******** **** ** ***** to ***** ** ***** ****"********** ******," "****** ******," *** "****** margin,"*** ***** **** ******* ******* *** experience ** **********, ** ***** ** focus ** **** ****:
**'******************************************************************** *********.******************************************'********************************,************,*************************.
***************************** **********************************.$************************************.***********************************,*******************************, ****************,****************************,******$******** ** **************************************** [**]. **********************************-*********************************************. [******** *****]
******, *******'* ********** ******** ********* *** "more **** **** ** ***-***** *******" for *** *******, *** ** *** pilots **** "******" *********, ** ** said ** ******* ******* ***** ****:
"Dramatic ************" ** ***** ******* ******** ** ****
*** ** *** ***** ** ***** for *** ******* ** **** ********** is ** ******** *** ***** *******, as *********, **** "**** *** **** where [*******] ***** ****," *** *** company ******* ** *** "********" ************ starting **** ****, ** *******'* ********* said ****** *** ****:
Our ******* **** *** **** ***** ***** ** **** ****, partly because we were in higher cost manufacturing, and that's changing. So I would guess by even by the middle of this year to the end of this year, we'll have lower costs associated with our manufacturing facilities. .... So I think you'll see relatively the same kinds of performance that you've seen throughout this year. But *** ****** ***** ****** ******** *********** ******** ** ** *** ******. [emphasis added]
** ****, ******* *** ******* ***** margins ** ~**% **** ** *********** compared ** ****, ********* ***** **** *******. *** *******, ********'* ***** ****** in **** *** ~**% (******** **** **-*).
** **** **** *** *******, *** company ******** ******** * *** ************* facility ** ******** *** ** ******* to "*******" *** ***** *** ******* engineering:
We ******* **** ** ******* *** ***** ******* *********** **********. **'** ****** ** *** ************* ************ and lower cost we've been in to high cost areas, because that's where we initially got started. But now we **** ******* ********** ** ******** *** **'** ********* ***** ************. So we will have volume capabilities to produce our products and capabilities going forward. [emphasis added]
Identiv's *** ********
** ***, ******* *** ******* ************ in *** ****, *********, *** *******, with********* ***** *******-******** **** "*****-****" *************, ***** ***** **** ** ***** these ****.
*** *********** **** ****** *** ****** particularly ********* ** *** ******* ** aggressively *******, *** *** ***** ****** those ** *******. ********, ****** ******* had *** ********** ******* ** *** healthcare ********, ***** ****** ** ******** and ***** *****-** ******* *****.
*** **** ********** ** ****** *** its *********** **** *******, *** *** recent ******* ******,*** ****** **** ** ******** **** Tags.
********, ****** *** ****, ******* ******** the ********** ** ***** *** **** analytics ** ***, *** ** *** its *** *****.** ***** ******** (*** ********** *** ******** **** *****) **** *** ******* *** ***** off. *** *******'* ********* ***** ** its ******** *****:
Identiv "** *** ****-*****" ** ***
***** * *** **** ** *******'* business ** ** ***, *** ****************** **** *** ******* "** *** well *****" ** *** *** ********, and ********* ********* *** ***** *********** is ***** ** ** *** ** the ***** ** ***** *** *** company ***** *******:
We're *** ****-*****. ******* ** *** *** ***** ** *** * ****-***** ******, and one of the things that our new president Kirsten Newquist brought to us was [that] at Avery [Dennison], she didn't know much about Identiv. So we *****'* **** ** **** * *** as we'd like to do and be able to do from * ********* *** ******** ********** to get the word out about Identiv IoT capabilities. So that'll ** * ***** ****** ***** **** ** ****.[******** *****]
4 ******* ** ***
***** *** *** ***** **** ** on *** ********** ********, *** ******* identified ***** **** *****, ********* ********* management, ***** *********, *** ********* ******:
More ** ***********
**** ** ******** * ********* ****** on ***********, *** ******* ********, *** its ***** ** *********** *******.
* *** **** ******** *** **** things, *** ***** ** * ******* entity. *** **** *** *** ** National ********.
*** ******* ****** *** ***** ** hugely ********* ** *** ** *** Government *** **** *** ******** ***** to ***** *******, ** ********, ** hoping **** **** ****.