Would a Hikvision / Pelco Deal Make Sense?

Author: John Honovich, Published on Feb 05, 2013

A persistent industry rumor says Hikvision and Pelco are in talks to do a merger / acquisition. Who knows the truth. Even if there are some talks, that does not mean anything will come of it.

In this note, we examine if it would make sense. It might happen, it might not but if it did, would it be a good deal and for whom?

* ********** ******** ***** **** ********* *** ***** *** ** talks ** ** * ****** / ***********. *** ***** *** truth. **** ** ***** *** **** *****, **** **** *** mean ******** **** **** ** **.

** **** ****, ** *********** ***** **** *****. ** ***** ******, ** ***** *** but** ** ***, ***** ** ** * **** **** *** *** ****?

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

Hikvision's **** ******

************ **** ******* **********, ****** ** *****'**************** *******, *** *** **** **** $* ******* *** ***** revenue, ****** **** *** ** ***** ************. **** ** ~* times *** **** ** ***** **** ******* ** ~$*** ******* USD (************'* **********). ****'* **** ************* ***** ******* *** ****** **** *** a ***** ************ *******. ********, **** *** ********* ********** **** net ****** **** **% (*** ******* ********* *** ********* ** the *****).

****, ********* *** * ******* ********* *** * *** ** cash ** ****. *****, ********** ** ***** ~$** *******. ** *** **** ** ***********, ****'* **** **** * times****'* ************ ******** ***** ** ***** ***** ************ ******* ** *** Americas. ****, ********* *** ***** **$* ******* *** ****** *** ****.

Hikvision's **********

***, ** *** **** ******* ***** ***** ************, *** ***** conclude **** **** ******* *** ************** ********** *** *********** **** far ******* *** ***********. *******, ****'* *** **** *** ****. On * **** ******* / ********** ***********, *** ******* ** middle ** *** ****, ** ****, **** ** **** **** solid ********* **** **** *** *******.

************ **** *** *** ** *** **** ***, ******* ** its **********, *** ******* ******* ** *****. *** *******, ** the **** *** *****, ********* *** ******** **** ******* ******* Safe **** ******** ********* **$*** ******* *********** *******. ******, ****** *** *********'* ******* ***** ********** ** *****. ***************** **** ******* **** ** ****** **** *** ****, **** are ***** ****** ** **** ***** ***, ******** ******* ***** core '**** *****' *********** *********.

Hikvision's ********* **********

************** ** ** * *** **** ****** ******. **** **** a **** ********* *** * *** ** ****. *** *** to ********** ********* ***** ** ** *** ** *********** ******, rather **** **** ***** *** *** **** ** ********* ************* into ******* *******.

***** ***** ******* * **** **** ***** ***** *** ** established ******* ***** ********* **** ********* ***** *** **** *** 'global **********.'

Schneider ******** / ***** **********

********* ******** **** ***** *** *** *** *** **** *+ years,********* ***** ** **** *** ~$*.* ******* ***. ** **** ****, ***** *** ~$*** ******* ** *******. We ******* **** *****'* ******* ***** ** ***** ******* ** that ***** ** *** ******* ******* ****** *** *********** **** providers *** ******** **** *** **** * *****.

Schneider's **********

** ******* ********* ***** ****** *** ***** **** ***** ** hugely ********* ****** ********* ******* * ***** *****. ** *** one ****, *** ***** *********** **** *** **** **** * huge *******. ** *** *****, ** ** * ***** ************* asset ** *** ******* ********* *********. ***** ********* **** ** Pelco's ******* ** ****, **** ******* ** *** *** ** line *** ****** ********* ***** (***** *** ******** ******** *** less **** ** ******* ********* ******* ************).

******* *********, **** **** * ****** ********* ******** ***, ** willing ** ************* ******* ** ******** *********.

Will ** ****?

****** * **** **** **** **** ** * **** ****, unless ********* ** ******* ** **** ***** ** ** **** sale ****** (***** ** *****). **** ** ********* ******** *****, there ** **** ******* ** ******* *********** / *********. ***** they *** *** ******* **** *** **** *** ***** ***** and *********? ** **, ****'* ** ********** **** **** *** such ** ******. *******, ***** ***** *** ** **** ******** customers, **** ***** **** **** ** ******** **** ** ***** existing *********. *** **** ** ********* ***** ***** *** **** structure **** ***** ******* ***** *************, ** ***** ** ****** impossible ** **** ***** ** *** ****** ****** **** ***** within *****.

**** ***** *** * ***** ***** *** * *********** **** if, *** ** **** *** **** * *** ** ***** to **. ** ** *******, ** **** ********* ** ***** a *********, *** ****** ** ***** *** ** ******* ********* is ****** *** ******** *** *** ************* **** ***********.

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

******** ******* **** **** **** *** **** *** ** ******** negotiations *** ********** **** *******.

Comments (12)

**, **** **** ******'* **** *** *****. ********* *** * strong *********** ******* ** *** ***** ****, *** *** ** its ********** ****** ** *** **** * *****, **** ** the ******** **** *********** **** *** ***** ** ** ****** management ******. **** ** *** *********** ***** *** ***** (* couple ** ***** *** ** *******) *** *************. **** *** turned *** ******* **** *** ********** **** **** *** **** products **** **** ******* **** ****** ** ** *********** **********.

*** ***** **** ** ********** **** ** ** * *********** advantage *** *********, *** ***** **** *** **** ****. *** real **** ** ***** ******** ** ** ** ***** *** marketing, *** ********* ** ****** ******** **** ****** ** ****. Since ***** ****** **** ** ***** ******* **** ***** *** the **** ** **** *******, *** ****** **** ****** ** real **** ******* *** *** ******** ******. ** ********* ******** they *** ********** ** ******** **** **** *** ********* **********. What *** **** *** ** ****** ** * ******* **** has ******* ********** ******** ** ******* ****** *** ******** ******** a ******* **** *** *** ***** ******** *** ********** ***** down ** *** **** *** *****. ********* *** ******** ***** that ** **** ** ******.

* ****** ***** ********** ****** ** ****** *** ** **** exercise.

* ** **** *** ******* *** ******* ***** ***** ** this *** - "*** ********* *** **** *********! * **** do ****" :)

* ******* *** ***** **** **** ***** ****** *** **********, review ** ********** *** *********, ********** ** ** ******** *** stock *********. (***** ** *** **** ********* ***** ********* ********* on ********* ****** ** *** ******** ********.) ******* ******* *****'* growth ****, * ******** ** **** ** ******; *******, ** the ***** ***** *** **% ***, *********** ******, *** **** should ** ** * ***** ********, *** **** *** ***** ask **** ********* ***** **** ** *****. *** ** *** "Undisclosed ************" ** ******* ***** ***** ********, **** *** ********** by ********** ***** **** * ****** ******* ********** ****** **** Pelco ***** ** **** **** *****.

** ***** *** ****** *****, * ****** ******:

*) ********* ** ******** ****** ** ****** ******* *** ******** roadmaps, *** ******** ********** ** **** ****** ***** ****** ********.

*) ********* ** ********* ***** ********** ****** ** ***** *** may ** ******* ** *** * ***** ******* *** ******* international ******** *** ********** ******.

******* **** ******** *** *** *********, **** ** ********** *** cents.

* ***** **** **** ** * ***** **** **** ****** using *********'* ***** ** **********; *** ** *** ******* ********* structure ** *********. ** ** ***** ******** ********** ** * so-call ******** ********* (***** ******* ********). *******, ********* *** ****** cash *** ****** **** **** ** **** **** ** *** cash ****.

*** ********** ** *********'* **** ** *****. **** *** ********** to **** ** * **** ****** ***** ** *** ****** digit ****** ****, ***** ********** ** ** **** *** *** been ************* ** *** ************ ***** ** *** *********** **** have **** **** ***. **** **** **** **** * ******** gap ** ***** ** ******* ******** *** **** ***. ** solve **** *******, **** **** **** ******* ** ******* ** based ************* ** ******* ** ** **** **** ********* * product *********** **** **** ** **** ****** *** *** ** market *****.

********* *** ********* ***** *****'* **** *** ******** ** **** for ******* ****** *** *** ********* **** ** ** ******** in *** **. ******, *** ** ****** ********** ** *** Chinese ******* **********, **** ** *** **** ******* "**** ****" deals ***** ** ****** **** *******. * ** ******* ***** the $**** ********* ****. *** ****** ******** ** ********* *** gave *** ******** *** **** **** ** ******* ** **** awaiting ***** *** ********** *** *********** ****** (*** **** *** convicted ** ******). ****** *** ********* **** **** *******, ********* stock **** *** ******** *** *** ********** **** **** **** leeway ** ** *** ***** ***** ** *** *********** ******.

*** ****** ********** ** ********* *** **** ** ***** ***** building ********* **** * $**-*** ******* ******* ** *** **** decade. ** ** ********** ********* *********** **** ** *****, ** will ** * **** ***** ****** ***** ** ******* ******.

** *** **** **** * *** ***** *** **** *** Pelco **** ** ******* ** *****, **** **** ******** ********* cloning *** ***** **** ** ***** *** ********* ********. ** yeah, ******* ***** **** ** * **** *** ******* ******** egos ** *****.

*****, ** *** **** ***** *** ******** ***** ** **% YoY ******. *'* *** **'* ****** ** * ******* ** they ***** ****** ***** *** ******* **** *** *** ** fight *** ********** *** ***** ******** (**** **** ** *******, Avigilon, *****, *********, ***.).

* ***** ********* ***** ** **** ** **** ******** *** all **** *** *** *****? :)

***, **** ***** ***** *********. * ****'* ***** *****, ********* *** **** **** ********.

** ***** ** ******* ** ****** ********** ***'* ******** ** business (********). **** ***** ****** ** ***, **** ***** ** the **, *** *** ** *** *** ********* ******* ***** year ******* *** ********.

****'* * **** ******* *** * ***** ******. * ***'* know ****** ***** ******/*** ** ******* ** *** **********.

**** ** ** **** *** - **** ***** ******* ***** Hikvision **** *****? *** *** ****** * *** *** **** their **** ******* *** ********* *** ***** ******* ******. ***** Hikvision ***** ****? ** ******'* **** ** ***** ********* *** similar ******* ************.

******, ** ********* *** ** **** ****, **** *** **** :)

********* **** **** **** **** ***** ****. *** ** ****** a ****** **** ******* *** *** *** *** ******** ** a ******** ******** **** **** *** *** *** ** *** with ***** ******* ************ ********. ******** *** *** ** **** in *** *** *** *** ***** *** ***** ****** *** and *** *** ******. ***** ******* *** **** ***** ******* to *** *** ****** ******** ** **** **** ** **** to ****** ***** ****** **** **** ******** ****. **** ** a ***** *** ** *** **** ******* **** **** ****** kits ** ****** **** ******.

*******, **** ********, ******! ****'* ***** ** ** * *** of **** ** *** ** *** **** ******* :(

*** @****. *** ***** ** ********* ** *** ******* ***** systems **** *** *** **** ******** ** ***** **** ****. Not *** ***** ** **** ** *** *** ****** *****. I ***** ********* **** ****** **** **** ***** ** **** cheesburgers :)

* **** **** *********. *** ********,**** ***** *** ********, **** ************* **** **** ***,***+ ******* *** ****, ***** ** **** of *******. ** *** ***** ****, ***** ***,*** ******* **** resulted ** $** ******* ** *******. ** **** ****, ********* is ***** ** **** ** **** ******** ** ***** **** to **** * **** ** *** ******* *******.

* ***'* ***** ********* *** ******* ****. ***** ** ******* showing * **** ****** ****** *** *** **** ** ****. I ** **** ******, **** *** ******* ** $*.* ******* in ******* ***** *** **** *****, ************ ********** **** **** hundred ****** **** ** ***** ** ** **** **** :)

***** ** **** ******* *** **** **** ******* ** *** retail ******. * ******* *** ** ****** ** ******** *** OEM ************ ******** ****** *** ********. **** ****** ***** *** markup ** ***** ******** ************ ****** **** ***** ****** ** retail ****** ** ***** ***. ***** ******* ****** **** ** higher ******* ** ***** ****** ************ ************ ********** ** *** South/Central ******** ******. * *** ** ***** *** **** **** tell. *** ****** ** **** ********, ** *** *********** ** increase ******* ** *********** **** ***** ** ********* **** ********* do *** *** **** *** ******* *** ***** *** ** higher *** ******** **** ***** ******. *** ******* **** ** when ********* **** *** ********** **** ***** *** *** ******** now ***** ** *** *** **** ****** *** ******** **** HIK ********* ***** ******* ******* *******. **** ** *** ** then? **** ** **** ** ***** **** ** *** ******* channel *******? * ** ***** **** **** *** ** * small **** ** **** ** ********** *** *** ******'* ** all **** **** ****** *****:*

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