Panasonic Sells Off / Spins Out Security Business

By John Honovich, Published Jun 02, 2019, 08:07pm EDT

Panasonic has sold off its security systems business to a private equity firm, after suffering years of challenges.

panasonic sells off

The new company, which will retain the Panasonic brand, tells IPVM that they will increase investment into R&D and the business.

Inside this note, based on feedback from the company, we examine:

  • Who the new majority owner is
  • What financial position Panasonic shall retain
  • How the new company is being structured
  • What issues brought Panasonic to this decision
  • How well the new company may do
  • What this (and the Pelco deal among others) says about the industry
  • How it compares to Sony, Canon and Hanwha moves

Financials **********

******* * ***** **** nor ******* *** *** business *** *********. ** would ****** *** ********* to ** *** (** revenue ** *****) ***** the *********** ********** **** business *** ***** **** the **** *** ***** (race ** *** ******, OEMing *****, ***.).

******* ***** **********, *********'* video ************ ****** ******* is ***** ****** ** the ******** ** ******** globally, ****** ***** **** companies **** ********, ****** and ******* *** *** all *** ******, ** the ****-******* ****** ******* range.

Official *************

***** *** * ******** public *************,*** **** *************** **** *** ******** Polaris.

Deal *********

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

*** *** ******* **** be ****** ****Security ******* ******** ******** of Connected Solutions Company of Panasonic as a main **** and will include the industrial & medical vision compact camera R&D department of its Innovation Center [emphasis added]

**** **** ******* * operations:

  • ************ ******* ******** (*********** Surveillance)
  • ********-******** ********** (****** *********)
  • ******* ******** (********** & Medical ******)

***** *** '******* ******' element ** ********* *** security, ********* **** **** that:

***** *** *********** ************ of ***** *** ********** shared ****** *** ******** Group, *** **** ******** Medical.

***** **** ** ******* differently ****** *** *****:

  • ** *****, ******* ********* Japan
  • ** ***** *******, ******* the *** *******'* *** internal ***** ****
  • *** ***** ***********, ******* existing ********* ******** ***** companies

********, *********'* ***** ******* is ******** ** **** deal**** *** *** *** sale ** ******* ***** ****.

New ***** ******* ******* *****

*** *** ***** ********* ******* *****, * ******* ****** firm **** *********** ** Japanese *********,********* ~** ************** ******** **** ********* like *******, *******, *** Toshiba.

******* **** *** **% of *** *** *******.

Panasonic ********* **% ********

***** ********* ** ******* off *******, ** ** retaining * **% ***** of *** *** *******.

Branding ******

*** *** ******* **** retain *** ********* *****. While ***** ** * reasonable ******* ** *** brand ********** ***** ******* in **** **********, ***** that ********* ***** ***** to **** ** ******* their ******** ******** ** most ** *** ***** plus **** * **% stake, ********* *** ** incentive ** ******** ******** the ***** ** ***** products.

Issues / ******** ******* ****

********* ** * **** company (~$** ******* ****** revenue) *** ********** *** **** ******* flat*** * ****** *** the ******** ******* ******** is ********* **** * fraction ** *** ******* (1% ** ****).

**** ******** ** ******** and ******** ********, *** a *********** **** ** the *****, ********* ***** to*****-**** *** ******* ******** (e.g., ********, **********, ** *******, ***.)

**** ** ****, ** was **** ** **********, with ********* ******* *********:

*****-******* ********** **** ********** to *** ***** *** marketing *****. ***** **** broken ****.... ******* ********* all ***** *** ********* activity ****** ******** *******, placing ********** *********** ** a *********** ****

**** ****** *** ******. Individual ******** ********,***** ******* *** *** in ****(*** ** ******** *** ******* ** Pivot3) *** *********'* ******** camera ********** ******.

****, ******, ********* ******** *** developer *** ***** ****** OEM ************. ***** *** *** was *****, *** **** money ************ *** ****** from****** ***** ********* ********************* ******* ****** ***************. **** ***** **** felt **** *********** *** it ********** *********'* ***** and **** ** ** increasingly ******* **-*******. ** least ** *****, ********* *** ******* OEMing *****.

Outlook *** *** *** *******

********* **** **** ** focus ** ***** ** innovator ** ***** ************ products. ** **** ***, being ***** *** ******* on ** ****** ****.

********* ***** **** **** investment **** ********:

*** *** ************ **** be ****** ******* ** the ******* ******** *****, and ** **** *** investment **** ********.

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

**** ** ********** *** value *********** **** ** accelerating ********** ** *&* and ********** *******.

** ********* *** **** out ***** *** ********** thin ****** *** ***** on ********** * **** range ** ******* **** can ******* **** ********, Axis, ******, ***., **** have * ****** ** grow *************.

Poll / ****

Possible ****** ***?

***** *** ******* *** not ************ ******* ** Polaris **** ********, **** did ***** * ******** of ******** ***** **** IPOs **** *** ***-****:

◆ ******: A former subsidiary of Toshiba, which provides Route Search Services. Polaris supported the company to become independent. It emerged from a mentality of conglomerate‘s subsidiary and redefined its position. In March 2011, successfully listed on “Mothers” of Tokyo Stock Exchange after 4.5 years.

◆ ** ********: Former LCD panel manufacturing equipment business division of Hitachi. Polaris has been supporting the establishment of an independent company structure and the implementation of growth strategies in global markets since 2016. It is now preparing for the IPO.

** **** *** ******* at **** ****-*** / turn-around, * ***** ****** company **** ***** ** sensible.

Pelco *** **** **** ****** *** ********

** * *** **** period, *** ** *** biggest ***** ************ ******* of *** ***** **** been *********** **** ***. The ********* **** ************'* **** ** ******* private ****** ****.

** *********** **** ************ / *****-******* *** ********* poorly. *** ***-********** ***** surveillance ********* ** *** last ****** **** ************** been ******* ** ***** surveillance, *** *****-******* *** machines **** **** ** IP ******* **** ** phones.

***, **** * *** era ** ** *** cloud-driven ***** ************ ******** starting, ** *** ********* that **** ************* **** be **** ** ***** the ***** *** ********** that ******* *********** *** provide.

Canon, ****, *** ********* ***********

**** *** ********* **** historically **** *** ** the ******* ******* ** video ************. ***, **** Japanese ****-********* *** *** of *** ***** ************ industry (** ***** ********). Panasonic's **** ***** **** than * ***** ********** *** ****'* '******** partnership'**** *** **** ********* transfer ** ***** *** Sony ***** ************ ******** effectively, ** *** ***********, a ***** **** ****** Bosch ********.

** ***** *********'* ******** has **** ****** **** Sony's ** ** ******** for ** ***********, ******* organization **** ******* **********.

****, *********, ** ***** from * ********** ***********, makes ***** *** **** direct ******** ****** ** video ************. *******, ***** has ********* **** ***** its ***** ** ********* its *********. ******, ** was * ***** ***, this *****, ********* ******** ************ ******* *** ******* of ******** * ****-******** of *********, **** *** Briefcam, **** **** ********** continuing ** *** *************.

Hanwha **********

****** ** *** **** case ******** *** ********* here. * ***** ***, when****** ******** ******* ******* video ***************** *** *********** ******** about ****** *** ***** and ******* ****** ***********. While*** ******* ***** *** lost, ****** *** ******** become ******** ** ***** surveillance, ** **** ******** heavily ** *** ******* development *** ******** ***** organization, ********* ********* ********** ************.

** ** * ****** that ********* *** **** to, **, ** *****, hope ** *******.

Comments (28)

Undisclosed Manufacturer #1

06/03/19 01:39am

 Good move on Panasonic's part. 20% stake for the brand name is a good deal. If they can find a way to produce cheaper cameras without OEM or quality drop, they will be a threat again.

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Undisclosed #2

IPVMU Certified | 06/03/19 02:23am

This, bizarrely, at least from a historical perspective, makes Canon the last direct Japanese player in video surveillance.

not so fast, what about Sanyo Sharp JVC Toshiba?

never mind.

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John Honovich

IPVM | In reply to Undisclosed #2 | 06/03/19 10:39am

Sanyo Sharp JVC Toshiba?

Related: RIP Sanyo CCTV, Toshiba Shutting Down Security Division

Btw, Japan's CBC / Ganz, is still in the surveillance market but they are much smaller overall and in the surveillance industry.

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Undisclosed #4

In reply to John Honovich | 06/03/19 12:16pm

Ganz does make some interesting and unique camera solutions.

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John Honovich

IPVM | In reply to Undisclosed #4 | 06/03/19 12:21pm

What specifically does Ganz make that is unique? There certainly could be but it's hard to tell without some reference or example.

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Undisclosed Manufacturer #3

06/03/19 02:24am

If they just make cameras that are easier to install, backwards compatible, reliable and integrate well.....

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Daniel Tyrrell

In reply to Undisclosed Manufacturer #3 | 06/03/19 12:46pm

Mostly just easy to install. By god they made their outdoor cameras hard to install.

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Undisclosed Integrator #7

In reply to Daniel Tyrrell | 06/05/19 02:02am

Which ones are you having difficulty with?  Aside from the annoying whips that come with 15 different connectors on the PTZs I have not heard of any issues.  Moog has made some fairly universal mounts for Panasonic here in the US, but I believe other regions have different mounts.  Perhaps in your region they are less universal.  We find Panasonic cameras much easier to mount than Avigilon because with Avigilon if you have ordered a pendant mount and needed a surface - it is RMA time.  Axis and Panasonic are the two which result in the least mounting complaints/missed parts in the field.

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Abdelhamid Metwally

IPVMU Certified | 06/03/19 04:59am

VideoInsight used to make a decent business by bundling their software with smaller 3rd party manufacturers such as Veilux. After they were purchased by Panasonic, they stopped doing that alltogether and just started being sold with Panasonic. Maybe its time to revist their older business model.

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Undisclosed Integrator #5

06/03/19 12:58pm

I wonder what will happen to the current Panasonic US sales team?

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John Honovich

IPVM | In reply to Undisclosed Integrator #5 | 06/03/19 01:00pm

It's being moved over, as is. The US sales organization did speak with us and was excited about the move. 

If anything, the US is at the heart of the plan. For example, from Panasonic's announcement:

The new company will aim to enhance its revenue and profitability globally centered on the North American market

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Undisclosed Manufacturer #6

06/03/19 01:27pm

Bosch should be next, as I think they'd want to focus on what they do best - Spark Plugs :) 

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Undisclosed Integrator #7

In reply to Undisclosed Manufacturer #6 | 06/03/19 08:45pm

Bosch should be next

I made the same statement to a coworker this morning when I saw this article.  That would be the former big 3 (at least in our market) of the previous decade all collapsing in short order.

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John Honovich

IPVM | In reply to Undisclosed Integrator #7 | 06/03/19 08:49pm

Hey, Bosch is investing big time in video surveillance, well, not in Bosch video surveillance :) but in SAST...

I don't see that happening, Bosch security is in stronger shape than Panasonic and Pelco plus has a wider portfolio (e.g. intrusion). However, I do think Bosch should invest more in their video surveillance product line. It's relatively thin compared to their strongest competitors such as Avigilon and Axis.

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Undisclosed Integrator #7

06/03/19 01:42pm

Retaining the brand name was a good move.  While Hanwha has done quite well without keeping the name it does take some of the pain out of the sale.

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Undisclosed #2

IPVMU Certified | In reply to Undisclosed Integrator #7 | 06/03/19 02:13pm

Retaining the brand name was a good move. While Hanwha has done quite well without keeping the name it does take some of the pain out of the sale.

this may be no different than Hanwha;  if you’ll recall Hanwha kept using the Samsung name for a couple of years after the sale, claiming they had use for as long as they wanted, but in reality had an agreement to discontinue...

 

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Steve Beck

In reply to Undisclosed #2 | 06/03/19 03:51pm

Totally agree. This also has happened with Honeywell. The Resdio name is replacing the  Honeywell fairly quickly. Total connect says Resdio, along with emails and I’m sure their new alarm panels will say Resdio on them. 

So in 18 months from now I doubt you will see much Panasonic in their marketing.

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John Honovich

IPVM | In reply to Steve Beck | 06/03/19 04:23pm

Steve, Resideo has a 40-year brand license but it is for "Honeywell Home", not Honeywell generally, as this financial filing notes:

After the Spin-Off, these products will be marketed and sold under the Honeywell Home brand pursuant to a 40 year license agreement with Honeywell 

Given that, 'Honeywell Home' will certainly be used (they are paying for it) but probably mostly for strictly residential offerings.

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Steve Beck

In reply to John Honovich | 06/03/19 05:35pm

How come my Total Connect 2.0 login screem has changed from Honeywell to Honeywell Homes to now Resideo?

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Daniel Tyrrell

In reply to Steve Beck | 06/03/19 05:59pm

It's possible they want to push everything to Resideo and maybe opt out of the Honeywell license, hard to say. I noticed one of my ADI bill also had a little Ridiseo logo underneath the ADI logo but not all of them did.

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Undisclosed Integrator #7

06/05/19 02:07am

The lack of comments in this thread is surprising.  Either Panasonic had less market share than I would assume or we are starting to see consolidation weariness with all of these manufacturers merging.

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John Honovich

IPVM | In reply to Undisclosed Integrator #7 | 06/05/19 11:52am

Either Panasonic had less market share than I would assume

That. Panasonic brand is bigger than its market position in video surveillance, especially its historical low channel presence. The Pelco deal response was much bigger and I attribute that to their former very strong presence amongst integrators.

The newco Panasoonic has a shot to change that as it may better focus on video surveillance and rebuilding the channel.

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Undisclosed Manufacturer #8

In reply to Undisclosed Integrator #7 | 06/11/19 03:50pm

I think everyone saw it coming...  They had been struggling and ramping things down for years now... Cutting staff, focusing more on VI and less on hardware, and holding on to a few legacy accounts and not playing in many spaces... It is a shame seeing a large, well-known brand go down, but it was barely holding on.  Now it will cling to the name, but who knows what is left or for how long... 

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Undisclosed Manufacturer #3

06/05/19 12:23pm

A strong Japanese brand with innovation will make some ground.  They need a product offering that reflects innovation because they “wore the old clothes too long”, maybe because they were expensive?

I know of a utility that bought over a million dollars of their recorders shortly before they went obsolete.  

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Undisclosed Integrator #7

In reply to Undisclosed Manufacturer #3 | 06/10/19 11:49pm

I know of a utility that bought over a million dollars of their recorders shortly before they went obsolete.

Which model(s) -  The old DVRs like the HD-316 or HD-616?  Most of the long-term product has been refreshed with newer models in the past couple years - NV300 --> NX300, ND400 --> NX400, etc.

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Carl Lindgren

06/05/19 11:10pm

This could be a positive. "Private Equity" firms are often criticized for taking viable companies that have just been mismanaged and rendering them asunder while selling the pieces off at an overall profit. Some famous names have been passed through the "private equity" meatgrinder which usually eliminates the brand. 

While Polaris may wind up to be no different than the so-called "Vulture Capitalists" in stripping value from their acquired companies, the "Management Message" on their website appears to say they want to "revitalize the Japanese economy and contribute to Japanese society, through assisting Japanese companies to advance into the global market with their unique technologies and brands and creating a new capital flow via funds in Japan."

It remains to be seen which direction the company will take. Occasionally, a Venture Capitalist buyout will reinvigorate a company.  All too often, the company's entity is eventually devoured and its reputation obliterated.

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Undisclosed Integrator #9

In reply to Carl Lindgren | 07/02/19 01:28pm

Vultures have their uses in nature. They like other organisms break down the old and essentially act as cleanup and recycle, and get a bad rap just because their not pretty. You can't blame the vultures for the animal dying or being too sick to live.

But no, I never trust what they say, either. I used to work for a publishing company that was bought for a song by a VC company. They had lofty words of pie in the sky plans to keep the publishing alive. But everyone knew the company was worth a lot less than the downtown riverside property it was sitting on. 5 years later the wrecking ball comes out (I assume after they found the highest bidder).

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Undisclosed #2

IPVMU Certified | In reply to Undisclosed Integrator #9 | 07/02/19 01:39pm

I used to work for a publishing company that was bought for a song...

was it by any chance a sheet music publisher?

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