Motorola Acquires IndigoVision

By John Honovich, Published Mar 17, 2020, 11:57am EDT (Info+)

Motorola owns Avigilon, an end-to-end video surveillance solution. Now, Motorola has acquired IndigoVision, another end-to-end video surveillance solution.

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So Motorola will now own 2 competing end-to-end video surveillance solutions. But why?

Inside this note, we examine the deal, contrast the two and look at the potential fit for Motorola.

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Comments (29)

There was a discussion earlier today, copying those comments:

Miller - Lots of former Avigilon employees at Indigovision. Interested to hear how this plays out.

#1 - Pure speculation, but I would guess this came about due to IndigoVision looking for an alternate hardware supplier, as they had been heavily reliant on Dahua. With the hardware bans, IndigoVision needed a new supplier, and Pedro likely hit up some of his connections there, leading to the conversations and eventual acquisition.

Tyrell - But what happens to their software. If Motorola really going to own and support two different VMS platforms?

I know not every VMS is the same, and each as their strengths and weaknesses, but still, seems a bit odd to me. Unless they're just trying to become a big thing like Honeywell, Johnson Controls, Form UTC, etc.

#2 - I scratched my head on this one.

Does Indigo's strength in Europe fill a void for MSI in Europe? How strong is Indigo in Europe? They're certainly not very strong in the USA with a few exceptions, no?

#3 - I truly don't understand this one whatsoever. Prior to 2019, Indigovision had been losing money for years and finally last year made $1.6M in profit for the first time in a long time. While it appears that Pedro has been making changes to somewhat turn it around, I wonder why this one was attractive to MSI? I agree with the prior post that there just doesn't seem to be value in MSI having 2 VMS's and 2 sales teams both fighting for shared resources. To answer the question above, the Avigilon team and revenue are much larger in EMEA than Indigivision.

If it is kept separate, it will just lead to internal conflict at the end of the day.

#4 - IV has some interesting intellectual property, such as a method to encode at a higher compression since the mid-2000's. Avigilon bought OV for the same purpose (enforce IP licensing) and I suspect they will be doing the same with the acquisition of IV.

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Tangential topic but there was a formidable amount of commentary when avigilon bought all the analytics “pioneers” patents. They were going the route of patent trolls, the licensing program was going to create great low maintenance revenue, etc.

I haven’t heard a peep about Avigilon licensing and trolling in years.

What changed? Any knowledge of the patent strategy and how it’s working?

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What changed? Any knowledge of the patent strategy and how it’s working?

I have not heard anything from them on patent licensing and they have taken down the previous patent licensing webpage. They do have an Intellectual Property page but it's a standard defensive type language and nothing about licensing or threatening others (as it had in the past).

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Motorola provided us this statement:

John Kedzierski, senior vice president, Video Security Solutions, Motorola Solutions, said, “Motorola Solutions is pleased to have reached agreement on the terms of a recommended cash acquisition of IndigoVision, a U.K.-based provider of end-to-end video security solutions. We share IndigoVision’s commitment to providing next-generation, end-to-end video security solutions that enhance safety, security and efficiency. IndigoVision’s end-to-end offering, global presence and customer base will complement our existing and growing presence in video security and analytics.”

They did say they are working on answers for our (and your) questions. If / when I receive them, I will update.

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What a strange acquisition!

I can hardly imagine that, long term, they will keep both Indigovision and Avigilon's software platforms...

Or maybe this is purely a financial transaction and they will keep the 2 entities completely separate (but then, why buy Indigovision at all if they have such dismal profitability).

Maybe there could be major cost savings by keeping the 2 brands but consolidating operations?

Very strange indeed.

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Qognify is playing 3D chess with the industry! Motorola will acquire at least 3 more VMSs to catch up!

But yeah, I don't get it...

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I was literally just going to say something along the same lines! Spot on. =)

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Patents... got to be patents!

also the IV oem provider is on the US entity list, effectively blocking their sales in the US.

if AVI can produce their hardware, that would make sense...

could also be an opportunity for MS/AVI to gain valuable hardware understanding for recorders. The AVI guy suggested that the appliance ranges will be 100% in-house by end of 2020. Seems like a cost effective recorder/appliance would be a good idea...

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Can someone expand on this comment please? Our firm uses a mix of solutions and one is IV. I was not aware that there oem hardware is on the US entity list. Which vendor are you referring to? Dahua? If so, I thought relationship end.

Thank you

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Yes, Dahua. For example, here is a shipment from a few days ago:

It says 'adapter plate bracket' and it might just be 300 pounds of brackets but those product descriptions can be wrong.

More broadly, IndigoVision says they have a new line which is NDAA approved:

This week saw the first production run of IndigoVision products from the Group’s primary camera supplier’s new facility in Mexico, which is intended to secure tariff-free access to the US market.

Last June, IndigoVision replied to us saying:

We can confirm the Ultra X is compliant with the requirements of NDAA conformance.

If it were to use the companies you have mentioned it would not be compliant

At that same time, Dahua started some manufacturing in Mexico, which raised some suspicions.

In any event, the financial disclosure says Motorola will look to replace IV OEM products with real Motorola ones:

Motorola Solutions believes that there are excellent opportunities to replace current third-party manufactured IndigoVision products with Motorola Solutions products. Motorola Solutions believes that the acquisition of IndigoVision will provide Motorola Solutions with enhanced geographical reach across a wider customer base. [emphasis added]

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Motorola has responded:

1. What is our response to the apparent overlap between Avigilon and Indigo Vision offerings? Motorola Solutions appreciates IndigoVision's go-to-market approach of providing end-to-end solutions for their customers. We have a similar approach and believe our common end to end value proposition will make it easier to bring our companies together.
2. Will IndigoVision continue to sell their cameras since they are mostly OEMed? - Until the close of the acquisition, it is business as usual for IndigoVision, and after closing we will evaluate ways to integrate our business efforts and leverage Motorola Solution's manufacturing capacity and camera portfolio.
3. Will the IndigoVision's sales team be run separately or as a part of Motorola Solutions or Avigilon?
4. How do we address VMS overlap and will IndigoVision continue to offer own VMS solution?
Until the acquisition closes it's business as usual for IndigoVision and we will operate as separate entities.

Net/net, they are not providing operational details until the acquisition closes. The IV financial disclosure says this is expected by the end of May 2020.

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Until the acquisition closes it's business as usual...

...and then it's not.

sounds like consolidation to me.

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In my opinion the VMS market is way to fragmented (especially below Genetec and Milestone) and Motorola is trying to get a bigger piece of the cake and is trying to consolidate parts of that market in their advantage. They will struggle to integrate the offers short term but they will win long term.

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The acquisition is got to be for IV's IP on certain products like CyberVigilant: CyberVigilant | Vigilant Cyber Security Systems | IndigoVision

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got to be for IV's IP on certain products like CyberVigilant

Maybe? IndigoVision does not mention that at all in their financial disclosure.

I have not heard a lot of discussion about CyberVigilant. Do you find it to be particularly strong?

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Last time I looked at Cybervigilant it was just a lightly modified SNORT. Not sure there is enough customization, or sales, of that product to add much to the valuation.

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IV for a long time (emphasis on LONG) has been making shockingly terrible hardware with a unbelievably high mortality rate. This was greatly improved by the addition of Dell NVR's and Dahua cameras, but still leaves a lot to be desired. Especially at the price.

That being said, I have long been a fan of their VMS, and their own cameras/encoders have fairly impressive bandwidth.

I don't believe that IV will add much value to MSI/AV, other than the fact that they will inherit a number of very nice legacy clients and potentially remove 1 more enterprise class VMS from the marketplace.

It would make the most sense to me that the acquisition of IV will enhance the reach of MSI and provide an almost immediate influx of sales and support staff who are currently working for one of the hardest brands to sell.

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Great Fit! Both good companies. IV was a true leader in the early days of enterprise video. IV mismanaged for many years...CFO's not the best to lead and manage technology companies.

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Motorola DID NOT buy IV for Cyber Vigilant. That just doesn't make any sense. That never took off for IV in the first place.

IMHO Its real simple what they did here - they bought IV for the Ultra line of cameras. The same way they bought VideoIQ years ago. The Ultra line of cameras is the ONLY value IV brings to this. Everything else IV has is commonplace in the market. IV will become an Avigilon camera line similar to what Video IQ has become, or the ultra technology will be incorporated into Avigilon core cameras.

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Huh??? Avigilon has duplicate camera manufacturing sites in North America capable of ramping up to ~$2B of camera sales capacity and they already have the, relatively undisputed, best self learning analytics on board the camera (started from Video IQ acquisition)

Please tell, what value does Ultra bring to the table? And how on earth has Video IQ become an Avigilon camera line???

refraining from further comment.

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What about patents held by Indigo? Many times the company is worth nothing, the patents are what we look for.

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I am interested to see if Avigilon is planning to expand their video appliances, and 3rd party native drivers using some of the IV hardware they've offered for years.

IV also has a very robust and expandable way that they cluster their servers for redundancy which would rapidly grow the new Avigilon Cloud Service capabilities for multi site analytic .

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An investment banker who worked on the IndigoVision deal says he is pivoting from whiskey to hand sanitizer:

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...to figure out how quickly I can build infrastructure to fill 4oz bottles rather than 750mls with what used to be delicious tasting whiskeys...

i think they've already figured that one out.

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The IndigoVision board approved the deal on May 11th, per the announcement. There are still some legal procedures to finalize and then the acquisition will be complete.

In the meantime, strangely given this imminent deal, IndigoVision started to OEM Dahua's fever camera solution.

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No one is perfect =) but we are getting there

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Overall, I am not surprised that the IndigoVision board approved this deal whatsoever.

Having been in this industry for many years at this point, I used to think that the sale of Pelco to Schneider Electric for $1.6B was the epitomy of "perfect timing" as it took place a month or two before the Great Recession. The point being, had the final negotiations been delayed by 30-60 days, then would Pelco's value been that high?

However, the announcement of this acquisition was on March 17th right at the cusp of COVID-19 having an impact in the US. I have to wonder if this deal were even delayed a mere week or two, would Motorola still signed on the dotted line for a full $37.2M? Would they have even signed the deal at all?

Hats off to the IndigoVision team and those involved in the timing of this sale.

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