Security

Good Buy for HID. Good Sale for ACRE. But will this Hold Back Open Systems?

During the last six months we have published a number of articles relating to the growing connection between Physical Access Control, ONVIF and Identity Management. The announcement last week that HID Global will buy Mercury Security, subject to regulatory approval and customary closing conditions, could have very significant implications; Bringing forward integration & total solutions across identity management and access control. The question is will this help deliver open or proprietary systems? Lets first of all put this deal in the context of acquisitions in the physical security manufacturing industry in the last 24 months. Our records show that there has been a decline in the number of deals over this period with only 3 significant deals this year, with Mercury looking to be the highest in value. Financial details have not been released but it should have achieved an exit multiple of over 3 times its annual revenue. This is based on 9 years […]

Stay ahead of the pack

with the latest independent smart building research and thought leadership.

Have an account? Login

Subscribe Now for just $200 per year per user (just $17 USD per month) for Access to Quality Independent Smart Building Research & Analysis!

What Exactly Do you Get?

  • Access to Website Articles and Notes. Unlimited Access to the Library of over 1,700 Articles Spanning 10 Years.
  • 10% discount on ALL Memoori Research reports for Subscribers! So if you only buy ONE report you will get your subscription fee back!
  • Industry-leading Analysis Every Week, Direct to your Inbox.
  • AND Cancel at any time
Subscribe Now

During the last six months we have published a number of articles relating to the growing connection between Physical Access Control, ONVIF and Identity Management.

The announcement last week that HID Global will buy Mercury Security, subject to regulatory approval and customary closing conditions, could have very significant implications; Bringing forward integration & total solutions across identity management and access control. The question is will this help deliver open or proprietary systems?

Lets first of all put this deal in the context of acquisitions in the physical security manufacturing industry in the last 24 months. Our records show that there has been a decline in the number of deals over this period with only 3 significant deals this year, with Mercury looking to be the highest in value.

Financial details have not been released but it should have achieved an exit multiple of over 3 times its annual revenue. This is based on 9 years of recording M&A data analysing exit multiples. This would have realized a price of over $200m, which is big for a PACS business. Mercury, owned by ACRE, has operated as a separate business and is believed to be very profitable.

HID has a substantial market share for access credentials and readers where Mercury sells controller hardware. This enables a very strong synergy bringing new opportunities to Mercury and increasing market share for HID’s niche controller business.

However Mercury’s most important value is that many of the top mainstream access control vendors including Lenel, Honeywell, RS2 and Keri, integrate with the same Mercury hardware firmware, which has become a defacto 'open' architecture standard. This no doubt is a very important prize for HID Global, and could tempt them to create its own proprietary end-to-end system.

The Access Control business has remained largely insulated from the open platform revolution that IP Video Surveillance has greatly benefited from and ONVIF has so far not received the support from the PACS business that is needed to make the business an open one.

Possibly ACRE has taken the view that ONVIF will eventually win and now is the time to sell the "cash cow". Nevertheless they have been smart in selling Mercury to a solid, long-term technology partner making this a win-win for all companies involved.

HID Global’s strategy is to maximise the status quo whilst it lasts and build a much stronger relationship between Identity Management business and Access Control. It would be naïve to think that they will not leverage Mecury’s strengths in the meantime.

You can find more information on the Security industry in our report The Physical Security Business 2016 to 2021 - https://memoori.com/portfolio/physical-security-business-2016-2021/.

[contact-form-7 id="3204" title="memoori-newsletter"]

Most Popular Articles

Smart Buildings

Azbil Building Automation Business & FY2023 Financials Examined

In this Research Note, we examine Azbil, a Japanese public company with a leading position in the domestic building automation market. The financial highlights and growth strategy analysis of the Building Automation business is based on their FY2023 annual results, year ending 31st March 2024, Annual Report 2023, and investor presentations. Azbil Building Automation Financial […]

MapMortar Startup Examined
Energy

MapMortar Examined: The Google Maps for Zero Carbon Building Retrofits

This Research Note examines an early-stage UK startup, MapMortar which has developed a retrofit twin platform designed to help large commercial real estate portfolio owners and asset managers model and simulate portfolio decarbonization to plan, manage, and execute retrofitting at scale. Founded in 2022 as Mortar.io, the startup changed its name to MapMortar, headquartered in […]

AI in Commercial Buildings
Smart Buildings

Major Players Put Their Weight Behind AI in Commercial Buildings

The development of artificial intelligence (AI) in commercial buildings is far-reaching, leading to a broad adoption landscape. The strategic positioning of key players in the AI market for commercial buildings is a critical aspect of understanding the current landscape and the future potential of AI. “Many large building automation firms are at the forefront of […]

Subscribe to the Newsletter & get all our Articles & Research Delivered Straight to your Inbox.

Please enter a valid email

Please enter your name

Please enter company name

By signing up you agree to our privacy policy