Vivotek Delta Acquisition Concludes

By: John Honovich, Published on Oct 02, 2017

On August 8, 2017, Delta Group made an offer to acquire Vivotek.

Now, the acquisition process has concluded.

Inside this note, we examine the conclusion, the ownership details, share feedback from Vivotek management, concluding with an analysis of the potential impact to Vivotek and how this fits with the ongoing race to the bottom and to safety.

** ****** *, ****,***** ***** **** ** offer ** ******* *******.

***, *** *********** ******* has *********.

****** **** ****, ** examine *** **********, *** ownership *******, ***** ******** from ******* **********, ********** with ** ******** ** the ********* ****** ** Vivotek *** *** **** fits **** *** ******* race ** *** ****** and ** ******.

[***************]

Delta ***** ***********

***** ***** *** ******** 49.22% ** *******'* ******, according ** *******. **** will **** ***** *** controlling *********** (******* ** Techwin / ****** *** Hikvision / ******* **********). Previous ** *****'* ***** acquisition ** *******, *******'* stock ********* *** ***** diverse **** *** ******* 9 ************ **** ****** ~1/3 ** *** *******, as ***** **** **** pre-acquisition ****** ***** ****** chart:

Board *******

******* ***** **** ***** board ** ********* ******** occurred * ****** *** and *** **** *** is *** ******* ***** next ****, **** ***** can **** *** ****** for ***** *****. ******* added **** "*** ******** shareholders *** ********** **** is **** ** **** Delta ***** *** *********** shareholder."

Delta's ****

*****'* ******** ********* *** Vivotek **** ** ** of ***** '*&* ********' and **** ******* ***** ******* "the *****-***** ************ ** [Delta's] ******** ********** *********", claiming * ********* ********:

  • ********: "******* ******* *********** solutions ******* ** ********** a ****** ******** ** applications"
  • *****: "******** *****’* ******* global ******** *** ****** channels ** ***** *** performance"
  • *************: "******* **** *****’* automated ************* ******* *** significant *********** ********** *****"

Who ** ***** *****?

***** *****(** ******** ** ***** Airlines) **** ~$* ******* annual ******* *** ** one ** *** ~** largest ********* ** ******, though **** *** **** recognition ** *** ****. The ******* ** ************* and ********* * ***** electronics ************, ****** **** have **** ********* **** other *******, **** ** automation, ***** ******* ***** be ******.

***** ******* ********* ***** automation ** *** ******** of ***** * ********:

*** *******'* ********* ***** gives * ***** ** their ***** *** *********. Notice **** ****** ** it ** ********** *** only * ****** ************ related *******, ***** ***** *** ***:

Vivotek ********** ********

******* ******** ******** ** IPVM ** *** ***********, emphasizing ************:

 ******* **** **** ** ** independent ****** *** * pubic ****** ******* **** the **** ********** ****.

************ ***** ** *********, says *******:

*** ******* ************ ********* will **** ****** *********, while ** ******** **** Delta *********** **** ***** worldwide ********** *** ******** capabilities ** ********* * stronger *** ******* *********.

*** ***** ***** *** brand ***** ********, ********* to *******:

******* ***** **** **** ****** in *** ************ ******** and *** ***** ** offering *** ******** ************ solutions **** *** *******.

** *** **** ****, Vivotek ********** *** ********* benefits ** ******** *** manufacturing **** ***** ***** in *** ****.

Financials *** ****** *********

******* ********* *********** *** been ********** *****, **** a **% **** **** the **** * *****, going **** $** ******* in **** ** $*** million ** **** (*******'* ************ ******* *********). ***** *********** ** ** ~**% though ******* *** **** ~36%.

*** *********** ***** ****** Vivotek ** * ****** capitalization ** ~$*** ******* USD, ~*.* ***** ***** 2016 sales. **** ** * modest ********* *** * company **** ********* ** grow ******* *** ******* decrease ** ************* ** still ******** **********. 

*******'* ****** ********* ** still **** **** **** 50% **** *** **** in ****:

Competitive *********** ** *******

*******, ****** ***** ************ manufacturers **** **** **** hard *** ** *** rise ** *** ******* and *** **** ** the ******. ******* *** done comparably **** *** *** become *** ******* ****** video ************ ************.

** *** ***** ****, during **** ******, ******* has ******* ** ** more ** ** *** provider *** ***** ****** rather **** * **** market ** ****** ********, as ***** **** ******* from ********* *** ***** combined **** ***** *** **** aggressive ***** *** ********* expenditures **** ****** ***** *******.

Race ** ******

** ******* *******'* **** here ** **** ** an ******* '**** ** safety' **** ** * response ** *** **** to *** ******. *********** companies, *** **** *******, are ****** *** **** challenges **** ******* ****** and *** *********** ** Hikvison *** ***** ** spend ** ******* ** sales *** *********. ******* it ** **** *** Milestone ******* *** ** Canon ********* ******* *** ** Konica *******, ****** '*********' ***** ************ with *****, ********* **** *** find * ****** / more ******* ****** ** shelter **** ****** **** turbulence, *** ****** **** as * *******.

******* ******* *** ******** ***** "What **** *** *** ongoing **** ** *** bottom **** ** *******'* decision?" ******** ** ****** the ***** ****** ***** production *** ********** ********. We ** ***** **** Delta *** ******* ********** benefits, ** **** *** ~40x ****** **** ******* and **** ********* ***** could **** **** ** reducing ************* *****. ** the ***** ****, *** meager ******* **** *******'* current ***** ***** (**** lower **** ******* ********, *.*., for ***** ******** ****** companies ******** **** ** Mobotix ** ****) ** a **** **** ******* saw challenges ***** *********** *** and ** *** ******.

Automation *** ***** ************ ************ **** **********

***** ********** *** ***** surveillance *** **** ********* systems ** ****** *************, the *********** ** *********** of ***** ******* *** remained * ***** **** of *** ******* ***** surveillance ******, ** ***** systems *** ********* ****** and ******* **********. ******* this **** ****** **** *** expansion ** '***' *** more ******* ******** *** video ************ ************* **** generally *** **** **** ** rely ** ********** ** a **** ****** *** significant revenue.

How **** ** ****?

** ****** *** *********** not ** **** * significant ****** ** *******, especially *** ** *** short ****. ** *** extent **** ***** ****** Vivotek ** ****** *********** as ******* **********, *****'* superior resources *** ************* ***** could **** ******* ****** compete ** **** ********** market.

** ***** ** *** West, ** ** *** expect **** ** ******** from ***** **** ** comes ** ***** ** channels ***** ***** **** not **** * ****** presence ** ********** *** a ****** ******* ***** to ****** / **** Vivotek.

****, ***** *****'* ***** on **********, ** ***** ******* this, ** ***** ******* **** Vivotek **** ***** **** of * ***** ****** in **** *******, ****** than ******** ** **** market ********, ***** ***** continue ***** ****** ******* approach.

[****: **** **** *** first ******** ** ****** 10, **** *** ******* in ******* ** ******* the ********** ** *** deal.]

Comments (14)

Avatar

Claudio Almeida

08/10/17 02:38pm

"...Vivotek will stay as an independent entity and a pubic listed company with the same management team."

Sure! They always say that...

Anybody knows any acquisition that keeps that promise for at least two years? 

 

John Honovich

IPVM | In reply to Claudio Almeida | 08/10/17 02:48pm

Anybody knows any acquisition that keeps that promise for at least two years?

Answers:

March Networks, acquired by Infinova 2011/2012, CEO and VP Sales/Marketing still there many years later.

Axis, acquired by Canon 2015, everybody in management remains as is.

Even Milestone, acquired by Canon 3 years ago, same CEO, still lot of the same key people.

Btw, technically Exacq meets that as well, but the co-founders / management team left after the 3 year earn-out.

Let me say, I agree that generally management teams change but a lot of that has to do with how the acquirer runs the company. The way Delta describes the deal leads me to believe they will be run as a subsidiary which lends to a higher probability of management staying. By contrast, if Delta was saying they were buying the 'technology' or folding into some existing division, likelihood of management team getting pushed out would be very high.

Avatar

Claudio Almeida

In reply to John Honovich | 08/10/17 03:43pm

Yes, John, you're right.

But I'm afraid the list of those companies who changed everything is even bigger. And the worst thing is those companies who destroyed the acquired companies.

For instance, Schneider acquired Pelco; Tyco group acquired DSC, ADT, American Dynamics and others

At least here in Brazil, these companies almost disappeared from the market

G4S acquired several Brazilian companies and close them, even failing to conquer the Brazilian market.

Same for Siemens.

 

Undisclosed #2

In reply to Claudio Almeida | 08/11/17 11:58pm

No disagreement here, but it would be interesting to see the statistics on acquisitions where it was clearly stated the acquired company will remain independent. If no such claim is made, then it can probably be assumed there would be fairly dramatic changes.

Pelco is a good example where they appear to have been integrated with Schneider Electric rather than continuing to act as an independent organization under a parent organization.

Avatar

Claudio Almeida

In reply to Undisclosed #2 | 08/14/17 03:12pm

"Pelco is a good example where they appear to have been integrated with Schneider Electric "

I think the better word in this case would be "Pelco... have been DESintegrated by Scheneider Electric" 

Undisclosed Manufacturer #5

In reply to Claudio Almeida | 08/14/17 03:16pm

Yes but this is a fairly common practice in Taiwan, and, most of the time, the acquisition does stay independent. Delta will of course insert some C-Level influence overtime, and perhaps do operational changes into things like Supply Chain, as well as some process changes to improve efficiency, but as far as what Vivotek's customers see, I would expect very little change.

Undisclosed Manufacturer #1

08/11/17 08:39pm

Their logo's seem to match pretty well... so they've got that going for them.

:)

Avatar

Tim Pickles

08/14/17 07:21am

I'm probably with John on this one. Tyco, as we all know, pretty well decimates the companies it takes over - but that is their corporate strategy and underlying business model.

When the acquiring company is more at arms length from the entity it's taking over, such as Delta is, they may well sit back and leave them to it. This make it easier to off-load at a later date also should the company flounder or be sold of as a significant asset.

The Latin American market is a brutal market so probably not indicative of the EMEA region which is, perhaps, a little more pragmatic. Having said that, the Honeywell acquisition of Ademco/Micro-tech years ago, left the Galaxy product woefully supported with next to no development in over a decade set to follow a DM path to hell. I'm guessing it's the arrogant giant approach of the Honeywells/Tycos, that's the difference here. They are a million miles away from the customers face but are very much the bulge in NASDAQs trousers.

Undisclosed #3

In reply to Tim Pickles | 08/14/17 08:21am

I'm guessing it's the arrogant giant approach of the Honeywells/Tycos, that's the difference here. They are a million miles away from the customers face but are very much the bulge in NASDAQs trousers.

In Tyco's case, the bulge may also be due to an expanding Johnson ;)

 

Undisclosed Integrator #4

08/14/17 02:37pm

Well goodbye vivotek as we.know it.

John Honovich

IPVM | 10/02/17 06:11pm

Update 10/2/2017: 

Delta Group has acquired 49.22% of Vivotek's shares, according to Vivotek. This will make Delta the controlling shareholder (similar to Techwin / Hanwha and Hikvision / Chinese government). Previous to Delta's stock acquisition of Vivotek, Vivotek's stock ownership was quite diverse with the largest 9 shareholders only owning ~1/3 of the company, as shown from this pre-acquisition Taiwan stock market chart:

Board Control

Vivotek noted that their board of directors election occurred 4 months ago and the next one is not planned until next June, when Delta can vote its shares for board seats. Vivotek added that "the original shareholders and management team is glad to have Delta being the outstanding shareholder."

Undisclosed #6

10/03/17 04:20pm

Would this effect Avigilon since Vivotek makes the fisheye camera for them?

John Honovich

IPVM | In reply to Undisclosed #6 | 10/03/17 09:08pm

As a general statement, I do not see why this move would impact any Vivotek customers since Delta Group has no real competitive issue / conflict with those companies.

Undisclosed Integrator #7

10/05/17 10:21pm

Total random note:

Vivotek was/is still one of my lead manufacturers.

I left the Security industry to join the A/V industry 3 months ago.  In meetings here and there internally and with customers the word "Vivotek" came up a few times.  I asked our PC to spell what they were saying and it was "Vivitek."

Guess who owns Vivitek?

Delta.

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