Motorola Solutions Buys Avigilon

Motorola Solutions Moves into Video Surveillance with Purchase of Avigilon

Motorola Solutions has acquired Avigilon.

Motorola Solutions (MSI), based in Chicago has acquired Avigilon. MSI is a $16 billion market cap publicly traded company who is a large technology provider but primarily an outsider to video surveillance.

On the positive side for Avigilon, the purchase price is $27 CAD or ~$1 billion USD, much higher than their recent low of $8 per share in November 2016 but still less than their all-time high of ~$33 in January 2014.

Motorola paid ~2.5 times Avigilon sales, moderately more than what Tyco paid for Exacq (which turned out to be a very good deal) but far less than the 4x Canon paid for Axis.

MSI’s 2017 revenue was $6.3 billion compared to Avigilon ~$400 million, making Motorola about 15x larger than Avigilon. As such, Avigilon will be a smaller division / portion of the overall Motorola business.

According to Jon Cropley, a principal analyst of video surveillance in the HIS Markit, Avigilon, one of the world's largest suppliers of professional video surveillance equipment.

Rumors about Avigilon being acquired have been circulating in the industry for years. Many expected one of Avigilon's competitors to acquire it. Instead, Motorola Solutions, a company with limited current involvement in the video surveillance market, has stepped in.

Motorola's focus on public safety projects is likely to have been a major motivation for the acquisition. City surveillance is an important element of public safety. Professional video surveillance equipment revenue has been growing faster in the city surveillance sector than in the rest of the market in recent years. IHS Markit forecasts this will continue, with the city surveillance sector growing at a compound annual growth rate (CAGR) of 11.1 percent to 2021 — and the total market growing at a CAGR of 6.8 percent.

IHS Markit estimates that Avigilon was the eighth largest supplier of professional video surveillance equipment in 2016 with over 2 percent of a global market worth $15.4 billion.

About the Author

Ralph C. Jensen is the Publisher of Security Today magazine.

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