Motorola Paid $297 Million For Openpath

By John Honovich, Published Aug 09, 2021, 09:46am EDT

Motorola Solutions has disclosed it paid $297 million for Openpath, the 5-year old access control startup, it announced acquiring last month.

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$297 million is a significant amount for a company with such a low revenue base but investors are quite bullish on the potential of SaaS physical security.

In this note, we compare the valuation Motorola paid for Openpath to Motorola's other physical security acquisitions - Avigilon, IndigoVision, and Pelco as well as valuations for other access control companies including Latch, S2, and Avigilon's acquisition of RedCloud.

** ********'* ** ******** call, ************* **** ****:

******** ********, * ****** in *****-***** ****** ******* solutions *** $*** *******

********'* *** **********:

** ********, **'* *** profitable. *** *** ********* of *** ****, **** year, *** **** ******* period, **'* ******** ***** $5 ******* ** *********** revenue ** *** ****** half ** **** ****, the **** **** ******, and **'* * ****** dilutive. *** ****** **** that, *'* ***** ******* by **** ***********. * think **'* ******* **** around ***** ***** *********** authentication, ****** *******. * love *** ********, * love *** ************, * love *** ********** **** and *** ********** ****.

******** ******** ** ******* to **** *** ******* about *** ***** ** the **** ** ********'* financials.

Revenue **** ~$** ******* *********

**** ********* **** ******** will ******** ~$** ******* in ******* **** ****, based ** ********'* ********* of "***** $* ******* of *********** *******", ** the **** * ******.

Valuation - *** **** *******

******** **** ~** ***** what ********'* **** ******* is ******** ** **. Compared ** *********** ******** security ********* (********* * to ** *******), **** is ** ********* **** valuation. *******, ***** *** growth *** ****** ********* of ** *****-***** **** company, **** ** *** out ** ****.

Burn **** - $** ** $** ******* *********

**** ********* **** ********'* burn **** *** **** will ** ** *** range ** $** ** $20 *******, ***** ** Motorola's ******* ***** ******** being * ****** ******** (Motorola *** ~*** ******* shares *********** ********** ** a ****** ******* ~$* million *** *** **** 5 ******).

**** **** ***** *** commonplace *** *****-***** **** companies *** ** ***** expect ******** ** ******** to ** ************ *** many ***** ** ****, as **** ***** *** business.

Comparisons ** ***** ******** ********* ************

******** ** ************* ********* than ********'* ***** ******** security ************, ****** * much ****** ********* *** a *** ******* ***** company. *** *******:

  • ****:******** *********** ~$* *******, **** 2018 ******* ** ~$*** million *** * *.** prices ** ***** *********. Avigilon *** ~** ***** old **** ********.
  • ****:******** ******** $*** *******, **** 2019 ******* ** ~$*** to $*** ******* *** a *.** ****** ** sales *********. ***** ** 20+ ***** ***.
  • ****:******** *************** $** *******, **** 2020 ******* ** ~$** million *** * *.* prices ** ***** *********. Indigovision ** **+ ***** old.

***** ********'* ******* **, by ***, *** ******** of ***** * ************, Openpath *** **** ****** growth ********* *** * more ********** ** ********* SaaS ******** *****.

Comparisons ** ***** ****** ******* *********

*******, ******** ** **** access ******* *********, ********'* valuation ** ********** ******.

*** *******, *** ******* access ******* **** ** the **** **** ******** *******, ** ***** ** obtained * *** ****** to ***** ********* ** ~$18 ******* ** **** revenue ** ***** ****** at **** **** * billion *******.

******* ******* ** ****-********** metal ************* *** ******** **** ***** ** sales *********, **** **** $4 ******* ** **** sales ****** * $*+ billion *********. ********** **** valuation ** ******** ****** investing $** ******* ** Evolv.

***** ** ***** ***********, one ***** ***** **** Motorola ******** * ******** bargain *** ********** ********. On *** ***** ****, significant ****** ****** ***** whether *** ***** *** Evolv **** ********** *** sustainable.

***********, ******** ** *********** access ******* **********, ********'* valuation ** ***** ****. For *******,** *** ******** ** UTC ** ****. ***** *** ********* never ******** ********* *****, S2's ******* *** ********* at **** ** ******** while *** ******** ***** were ********* ** ******** of ******** ** ******* industry **********. ** *** positive **** *** **, they *** ****** *************, which ******** ***** *** Openpath's ****** ****** ********* and ******-** **** ****** potential *** ******* ****-**** financial ******.

*******,******** ******** *********** $** ******* ** 2013 ****** * *** million ** ******* ** that ****. ******** ***** to ******** ** ***** this ****** ******* *** it ***** ****** * significant **** ** ***** business ** * *********** competitor ** *** ******.

Willingness ** ***** *******

**** **** ** ******** shows *** ********* *********** to ***** ******* ** become * ******** ********** in ******** ********. ***** Indigovision *** ***** ******* Motorola ** **** ****** products *** ******** *****, the ********** ** ******** is ******* *** *** more ****-**** *********.

******** ********* *** **** to *****, ** *** company ********* $*.* ******* in********* **** **** ** 2020 (*** *******), ** **** * ~$300 ******* **** **** is *** ********* **** the ******* **** ** challenged ** ****.

Worth **? ****** ******* **********

************, ****** ******* ********* did *** ******* **** valuations. **** **** ** interesting ** ******* ** whether **** ***** ********** of ******-** **** ********* can ****** *** ****** potential ** ****** ******* entrants *** *** **** will ******* ******* ******* incumbents.

Vote / ****

Comments (17)

*** ** **** ********* how **** ******** **** for ******? ****** ******** prior ** *********** *** somehwere ****** *-* *******?

**** * ** ********* about ** **** ******** split ******* ****** ******* (not ********) ** ******** sales ****** ******** *** RMR *****. ** ***** to ** **** ******** still ***** ** **** profits ** **** ****, but *** **** ** what ******* **** ******* small ******* *** ******* company ** ****** *** by ******* ******** *** decides ** ******* *** market **** ***-****/***-****** ****** control ******** *** ****** focus ** ****** ***** and ****** ****** ** RMR *****? *** ***** Openpath's ************* ** ******** by ****, ********** ** light ** *** **** that ***** **** ********** be **** ********** **** pricing ****** ***** ** this ****** ****** ** mature *** ********.

* ****** **** ** the ***** *** ** the ******** ** ******** commenter ******* **** ***, who ******** **** ******** should *** ** **** at **** ****** *** instead ***** ** *** RMR. * ******* ******** has *** **** ******* needed ** ***** ** this ******** ***** ** they **** **.

**** ******* ********* ** either ****** ******* **** really ******** ** ******* in **** *****, *.*. low ****** ** ******* hardware ***** ** ***** to **** ** ***? Are ***** *** *******'* of *** *** ***** in ****** *******? * wouldn't ******** ******* ** be * ******** ****** in ****** ******* ** this *****.

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* **** ** * PROFITABLE ****** ******* ******* that ** *** **** for $*** *******!! ***!

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Funny: 10

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

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****** .... *** *** lofty *********** *** ****** that ***** ***** *****-**** entrants ** ****** ******* can ****; *** **** truly ***********?

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***********, * ***** *** yes, **********? ** *** start ** ****** ** $80 ******* ** ** it ** **** ** build * ********** ***** in **** ****** ** time **** *** ******** cash **** ****! ** you *** ****** ***** to ** ******** ****** model **** ** ******* profitable *** ***** ********* expect * ***** **** will ******* ********** ***** results. ** **** **** our ***** ***** ****** in **** ** *** first * ***** *** have ***** **** **** 2.5 ***** **** **** so *** **** ****.

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** **** * ***** of ****** ** ****, here ** ** ******* from*****'* **** ******, **** ****** ** lose **** $*** ******* before ******** ** **** a ****** ** ****:

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******* * ****** ** 2024 ******* ** ** optimistic *** * ***'* think **'* ************ ** expect ** *** *** of *** ****** ***** businesses ** ** **** profitable ** **** ******.

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*** ***** ** *** sure, ********’* ***** **** big **** **** ***** insanely ****** ************.

** ***** **** ********** IP **** ***** ********* have ********* ** ******* it? *** ** **** with ********* ******* *****?

*** ****** ******* - pure***********…

*** ***** ***** **** to **** *** *******, you ***** *** * company *** ****, ****** out **** ****’** *****, and **** ** ** it ******.

Agree: 2
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** ***** **** ********** IP **** ***** ********* have ********* ** ******* it? *** ** **** with ********* ******* *****?

**** **** **********, *** attraction ** ********* *** the ******** *****. ********* think ***** ********* **** be ******, ****** **********.

**** ** *******, ****** and ******** ***** ****** aside, **'* ********** ** believe **** **** **** eventually ** ********* ********** because ****** **** ** paying ~$*** *** ****** per **** *******. ****'* a *** ****** ******** for ********* **** ******* new ******* ***** **** for *** **** *****.

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**** **** **********, *** attraction ** ********* *** the ******** *****. ********* think ***** ********* **** be ******, ****** **********.

**, *** **** ***** a ******** **** **** starting * *** ******** with **** ***** *** save *** *******?

****, *** *** * big **** *****, *** you’re *** **** ****** that **** *********/*****.

** ***** ** ******* with *** ******, ****** at **** *****.

****’* *** *******, **** would *** **, *** or *****?

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**, *** **** ***** a ******** **** **** starting * *** ******** with **** ***** *** save *** *******?

**'* * *** ** build ********. *** **** large *************, ** ** less *****/********* ** *** something (**** ** * premium) **** *** ** do ** ********, **** failing, ** ****** ** long **** *** *********** has ****, ***.

**** ***** ***** **** out ** ** * bad **** *** **'* pretty ****** ***** *** large ************* ** *** startups **** **** ***** traction / ******** * core *******, ****** **** doing ** **** ******* themselves.

Agree: 1
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**** **** ******** ****** promising *** **** ** least **** ** **** verkada’s ****** ********. ** Verkada ** * ****** indicator *** ***** ***** security ******* **** **** path ****** ** **** since **** **** * much **** ****** ******* which ***** ******** ****** pretty ****. * ***’* think **’* ********** *** where **** *** *** also ***** ***** *********** is ********* ** *** market.

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** ******* ******** **** paying **** *** **** for ************!

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*** ******* ** *** structure ** *** ****? Stock **. ****?

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******, **** ** *** SEC ******* ** ******** presentations ** **** **** has ********* ****.

*******, ***** **** **** more ******** ******* ***** the ***** ** *** deal** *** ** **** 10q ******:

*** ******* ****** ********** stock ** * **** value ** $********* ** ******* *** employees **** **** ** expensed **** ** ******* service ****** ******* *****. *** *********** **** includes *** ********* *** the ******* ** **** earn-out ******** ***** ** Openpath's *********** ** ******* financial ******* **** ******* 1, **** ******* ******** 31, ****.

**** **** *** ** the **** *** ********* motivate *** ******** ********** team ** ****, ***.

* ** *** **** if ***** ** **** will **** * *** difference ** **** **** since ********'* ***** ** pretty ****** *** *** been ******** ********** ** the **** * ***** save *** *** ***** of *** ******** ***** it *** *** ********* significantly:

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* ****** ** ***** were ***** ******* ******* up *** *****. ******* know?

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******, **** *** *** disclose ***, *** ****, there **** **** **** a ****** ** ** firms ******* ** **** Openpath **** * ***** would **** ******* ******* valuations ** **** ******.

********* ********'* ***** **** Openpath * *********** ** money *** ********, *.*., Latch *** * ****** valuation *** *** *** founders/execs **** ***** **** it ***** **** (**, for **** ********* **** it **** ** *******).

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** *** ******** **** Allegion ******* ******** $* mil ** ******** *** "future *********** *** *************" so **** ***** **** been ** *** ***. We *** * ******* with ******** **** ***** wireless **** ******** *** they **** ***** ******* to *** ** *** development ** ***** *** something *****.

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