According to the terms of the agreement, Motorola will acquire all of Avigilon’s outstanding shares for $27 per share. The $1B enterprise value of the transaction includes Avigilon’s net debt.
“This acquisition will bring Avigilon’s advanced video surveillance and analytics platform to the rapidly evolving public safety workflow, while also expanding our portfolio with new products and technologies for commercial customers,” said Greg Brown, chairman and CEO, Motorola Solutions, in a statement. “Video can play a powerful role in creating safer cities and thriving businesses. It can serve as highly efficient ‘eyes and ears’ for monitoring a given location, and advanced video analytics can proactively alert officials to a perimeter breach or quickly find a person who left behind an object of interest.”
A joint statement from both companies announcing the deal pointed to the role of cameras in public safety as well as surveillance and analytics enabling public-private partnerships between communities and law enforcement. Motorola explained that its customers will be able to purchase security and surveillance solutions “as part of Motorola Solutions’ portfolio of critical communications technology for commercial markets.”
“We’re very pleased to be joining Motorola Solutions, as their vision and strategy aligns fully with our own,” added Alexander Fernandes, Avigilon’s founder, chief executive officer and chairman of the board. “This combination will bring new opportunities to Avigilon, allowing us to accelerate our innovation and provide even more value to our customers.”
“I think it’s a great deal for Avigilon,” said Bill McQuade, president of Toronto-based security consulting firm Final Image, in an email to SP&T News. “The valuation makes sense based on their current revenue.”
In a research note, IHS Markit analyst Jon Cropley said that “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.”
According to IHS Markit forecasts, the city surveillance sector is growing at a compound annual growth rate (CAGR) of 11.1 per cent to 2021 compared to the overall market at 6.8 per cent CAGR. IHS also estimates that the command and control technologies and services market was worth almost US$5 billion in 2017, with Motorola holding approximately seven per cent, making it the largest supplier.
The acquisition is expected to close in the second quarter of 2018, subject to customary closing conditions.