In this Research Note, we examine the SALTO Group business, based on their recent activities, M&A strategy and our analysis of their market positioning.
Founded in 2001 and headquartered in Oiartzun, Spain, SALTO Group is a manufacturer of electronic locks and access control solutions. The Group consists of several companies including Salto Systems, Gantner, Conlan, danalock, Clay, and Cognitec.
In the first quarter of this year, Salto Systems has completed three acquisitions, augmenting its technology capabilities and expanding its regional presence:
- The acquisition of a majority stake in Dutch company, Bluefield Smart Access strengthens its Physical Identity and Access Management (PIAM) solutions capability.
- Cognitec, an automatic face recognition solutions supplier, headquartered in Germany, enables the integration of emerging biometric technologies and contactless solutions into Salto’s products.
- In preparation for further expansion of its market presence in the Asia Pacific region, Salto acquired the remaining 49% of its Joint Venture partner in Singapore. The Salto Singapore business unit is intended as a central hub within Asia, also covering Malaysia, Thailand, Laos, Cambodia and Myanmar.
A major strategic acquisition in October 2020 has enabled the firm to strengthen its product portfolio and consolidate its market position. Salto acquired Gantner Electronic Austria Holding GmbH, a European manufacturer of systems that enable automatic and contactless identification, based on RFID (Radio Frequency Identification) and NFC (Near Field Communication) technology. Founded in 1982 and headquartered in Nüziders, Austria, Gantner is specialized in access systems, electronic locking and locker systems, cashless payment, cash register and billing systems, staff time recording systems as well as ticketing and management software for leisure facilities.
Under its previous private equity ownership, Gantner doubled its revenues from €36 million in 2015 to over €70 million in 2020 and as part of its international expansion, the company was able to increase its market share, particularly in the USA, the UK and the Benelux countries.
With Gantner, the SALTO Group has a combined workforce of 1,200 employees in 40 countries and a turnover of €260 million.
The Gantner transaction was financed through a capital increase, bank financing and cash. The capital increase amounts to €125 million and was backed by existing shareholders such as Alantra (SP) as well as new investors such as Sofina (BE), Peninsular Capital (LUX) andFlorac (FR). The financial investors hold a combined 30% stake in Salto, while the remainder is held by the founding members and managers of SALTO (60%) along with private investors (10%).
Over the last five years, Salto has also augmented its position through bolt-on acquisitions and a joint venture stake:
- In July 2021, Doorware was acquired to establish a new subsidiary in Ireland.
- In November 2019, Conlan Aps, a Danish manufacturer of specialized access control products especially well-suited to the Nordic market was acquired.
- In June 2017, Salto Systems completed the acquisition of its remaining 40% stake in the Dutch company, Clay BV, in which the company already held a 60% stake. Clay is a wireless, cloud-based smart lock technology company founded in 2012 and based in Amsterdam.
- Salto Systems also announced the purchase of a significant equity stake in Poly-Control Aps, the manufacturer of Danalock to strengthen its leading position in electronic locks for the residential market. Adapted to European, North American and Asian markets, Danalock is tapping into the drive of keyless and connected locking solutions for residential properties on a global scale. Founded in 2003, the company is based in Harlev, Denmark.
Salto Systems is well positioned in the European and US markets, particularly in the hospitality market, which have driven year on year growth of over 20% since 2008. Apart from the large demand for digital locking systems in the hotel industry, the company has also targeted other vertical markets in recent years. According to Salto’s 2020 Sustainability Report, the group’s target markets and their share of the company's total sales are as follows:
- Commercial buildings – 22.5%
- Education – 18%
- Healthcare – 12.2%
- Hospitality – 19.6%
- Co-working and Serviced Office Spaces – 6%
- Retail – 0.9%
- Co-living and Student Accommodation – 4.6%
- Residential – 16%
Salto has been able to differentiate itself through strength in innovation and aesthetics. More than 50% of sales come from products developed within the last 4 years. According to our latest 2021 Physical Security Business Report, Salto Systems is a well positioned vendors in the access control market in terms of coefficient of innovation, but still faces some stiff competition from many of its financially stronger competitors in the market.
Combined with Gantner, Salto looks well-placed to maintain its specialized niche position in innovative locking, cashless payment and ticketing solutions.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.