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their product development on to
consolidate their current position
in VMS and enlarge their scope
to take in integration opportuni-
ties in access control and beyond.
Possibly moving on to other
aspects of control and monitor-
ing the built environment and
taking advantage of the current
hype surrounding the Internet of
Things. The acquisition certainly
creates a significant new player
in the global video surveillance
market. From that perspective it is
a win-win deal.
Whilst financial details have
not been disclosed an exit multiple
on 2013 revenue of around 2.5x /
3x looks likely based on findings
from our annual report on M&A
and investment activity in the
physical security business.
Memoori is an independent
market research company provid-
ing advice and business intel-
ligence to companies across the
value chain in security, lighting,
building automation and smart
buildings. n
When the world leader in open
video management software
(VMS) is acquired it's not surpris-
ing that it results in many hun-
dreds of column inches of widely
differing opinions; usually sur-
rounding the impact it could have
on VMS and the wider implica-
tions for the IP video surveillance
industry.
Some of this discussion has
focused on "Why Canon and
not a major camera manufac-
turer like say Axis?"
It surprised many in the indus-
try that Canon, not a big player
in the IP network camera market,
should steal this coveted prize
from right under the noses of the
major camera manufacturers. But
it's more likely that these major
players decided it could have a
negative effect on their camera
sales. Would their customers
prefer the status quo of indepen-
dently selecting a VMS supplier?
At Memoori we suspect that
they canvassed a number of cus-
tomers and on balance found that
the cons outweighed the pros and
the risk of buying into the VMS
business (incidentally one order of
magnitude smaller) would not be
worth taking.
So if this theory is correct
why would Canon be prepared
to take this risk? Well they have
less to lose and a lot more to
gain. They have much expertise
in camera technology but have
so far failed to combine this with
application know how on the
techno / commercial aspects of
the video surveillance business;
which would enable them to
compete with the best camera
manufacturers in the world.
The synergy of this acquisition
is that they can learn this from
Milestone. For Milestone they will
gain investment dollars and move
voice of
the security market
Jim Mchale, analyst at Memoori,
comments on the acquisition of Milestone:
"Itisawin-windeal"
when Canon's acquisition of Milestone Systems became
official and was published by the website Securityworld-
Hotel.com the reactions and views from security profes-
sionals all over the world were many and varied.
Jim Mchale, analyst at Memoori, has his own clear view
as he concludes that the acquisition is a win-win deal.
By Jim Mchale, analyst at Memoori
Memoori is an independent mar-
ket research company providing
advice and business intelligence
to companies across the value
chain in Security, Lighting, Build-
ing Automation and Smart
Buildings.
Jim Mchale, analyst at Memoori.
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