Top US Integrator Acquired by European Conglomerate

By: John Honovich, Published on Nov 18, 2009

Adesta [link no longer available], one of the top US integrators and representative of network convergence was acquired by European based conglomerate G4S. In the US, Adesta is well known as a major player in the high-end integration of government, military and industrial systems.

G4S paid 'total cash considerations' of $66 Million USD for Adesta. Adesta reported $92 Million USD revenues in 2008.

Compare to Henry Brother, a publicly traded company is valued at significantly less Prices to Sales than Adesta (.72 for Adesta vs. .43 for Henry Brothers).

For an extensive discussion and interview with Adesta's CEO, see SSN's report and analysis on the GS4 / Adesta acquisition.

SSN discusses the role of recurring monthly revenue and the implicit valuation of RMR in that deal. While the security industry is infatuated with RMR, given Adesta's low RMR (Adesta reports only 10% to 15% of revenue was RMR), it's doubtful Adesta's recurring revenue was a major factor.

Interestingly, famous security analyst Jeff Kessler criticized the deal [link no longer available] saying, "If there’s a lesson to be learned here, it’s how a great company like Adesta probably should have gone at a high price but didn’t because they didn’t have a lot of recurring revenue." Kessler contends that a "typical installation company would derive at least 25% of its revenue from recurring revenue."

In my personal experience running an integrator, I think it is difficult to generate a significant percentage of recurring revenue when you are a fast growing company like Adesta. Big projects are the quickest drivers of growth. Integrators could certainly have larger percentages of recurring revenue but generally at the expense of dramatically less total revenue.

Compare to our recent examination of "Should Integrators focus on recurring revenue?"

Comments : PRO Members only. Login. or Join.

Related Reports

Barnes Buchanan 2019: Despite 'Strange Narrative' Great Time To Be In Security on Feb 11, 2019
A "strange narrative" is being spun, said Michael Barnes [link no longer available] at the 2019 Barnes Buchanan Conference. However, despite that...
ADT Stock Drops After Announcing Loss And Amazon Delay on Mar 12, 2019
ADT's stock price dropped significantly after reporting heavy losses and delays in its Amazon partnership, as seen in the screenshot below: In...
Verkada Gets Half Billion Dollar Valuation on Apr 26, 2019
Last week, when we profiled Verkada (The Fastest Growing Video Surveillance Sales Organization Ever - Verkada), we predicted they would raise $40...
Knightscope Adds Just 2 Total Customers In Past Year, Yet Raising Money at $300 Million Valuation on May 02, 2019
This is no longer funny. While Knightscope has laughed it up promoting robot selfies, joking about a 'suicidal robot', the man who attacked a...
Avigilon President Henderson Is Out on Jul 09, 2019
Avigilon's President and COO James Henderson is out, abruptly, after a remarkable ascension over the past 8 years, Motorola VP Jack Molloy has...
Resideo Stock Plunges 37%, CFO Ousted on Oct 23, 2019
The horrible year for the ADI / Honeywell Home spinout, Resideo, just got worse, with their stock plunging another 37% today. Not even a year...
"Stress in the Residential Market" - Major Lender Exits on Nov 06, 2019
The residential security / 'alarm' market is getting worse, at least for traditional players. Now, one of the biggest lenders in the industry has...
Resideo CEO To Step Down on Dec 03, 2019
Resideo's CEO, Mike Nefkins, is stepping down, just 18 months after being brought in to lead the now plagued spin-out. Inside this note, we...
"Good Market, Bad Business Models" - Residential Security on Dec 11, 2019
Industry banker John Mack, at his company's annual event, took aim squarely at the problems in the residential security...
Vivint Valuation Falls $1.5 Billion on Dec 19, 2019
Residential market struggles continue. Now, Vivint's valuation has fallen $1.5 billion in its impending merger. Inside this note, we examine...

Most Recent Industry Reports

Verkada Paying $100 For Referrals Just To Demo on Jan 22, 2020
Some companies pay for referrals when the referral becomes a customer. Verkada is taking it to the next level - paying $100 referrals fees simply...
Camera Analytics Shootout 2020 - Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision, Uniview, Vivotek on Jan 22, 2020
Analytics are hot again, thanks to a slew of AI-powered cameras, but whose analytics really work? And how do these new smart cameras compare to top...
Intersec 2020 Final Show Report on Jan 21, 2020
IPVM spent all 3 days at the Intersec 2020 show interviewing various companies and finding key trends. We cover: Middle East Enterprise...
Vehicle & Long Range Access Reader Tutorial on Jan 21, 2020
One of the classic challenges for access control are parking lots and garages, where the user's credential is far from the reader. With modern...
Clearview AI Alarm - NY Times Report Says "Might End Privacy" on Jan 20, 2020
Over the weekend, the NY Times released a report titled "The Secretive Company That Might End Privacy as We Know It" about a company named...
Favorite Camera Manufacturers 2020 on Jan 20, 2020
The past 2 years of US bans and sanctions have shaken the video surveillance industry but what impact would this have on integrators' favorite...
"Severely Impacted" Mercury Security 2020 Leap Year Firmware Issue on Jan 17, 2020
One of the largest access controller manufacturers has a big problem: February 29th. Mercury Security, owned by HID, is alerting partners of the...
Apple Acquires XNOR.ai, Loss For The Industry on Jan 16, 2020
Apple has acquired XNOR.ai for $200 million, reports GeekWire. This is a loss for the video surveillance industry. XNOR.ai stunned the industry...
Installation Course January 2020 - Last Chance on Jan 16, 2020
Thursday, January 16th is your last chance to register for the Winter 2020 Video Surveillance Installation Course. This is a unique installation...
Halo Smart Vape Detector Tested on Jan 16, 2020
The Halo Smart Sensor claims to detect vaping, including popular brand Juul and even THC vapes. But how well does it work in real world...