Security

Hikvision’s First Major Deal Baffles the Market

The Video Surveillance industry has long forecast that HIKVision the world’s largest manufacturer would make its first major deal in North America; Its largest market outside China its home market. However on Friday, with more than $1.5 billion to spend it buys Pyronix a $30 million revenue (2014 Figures) Intruder Alarm business based in the UK. The fact that it did not elect to buy another Video Surveillance company is not so surprising since it has grown organically from its inception in 2001 to a $4 billion revenue company in 2015. This far outstrips any other physical security manufacturer in the world. It has been built up on its domestic market, China which is the largest single country for video surveillance equipment. They also benefit from the fact that its largest single owner, the Chinese government, is the world’s number one buyer. We expected that they would buy a substantial Access Control manufacturer, because this […]

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The Video Surveillance industry has long forecast that HIKVision the world’s largest manufacturer would make its first major deal in North America; Its largest market outside China its home market. However on Friday, with more than $1.5 billion to spend it buys Pyronix a $30 million revenue (2014 Figures) Intruder Alarm business based in the UK.

Acquisition

The fact that it did not elect to buy another Video Surveillance company is not so surprising since it has grown organically from its inception in 2001 to a $4 billion revenue company in 2015. This far outstrips any other physical security manufacturer in the world. It has been built up on its domestic market, China which is the largest single country for video surveillance equipment. They also benefit from the fact that its largest single owner, the Chinese government, is the world’s number one buyer.

We expected that they would buy a substantial Access Control manufacturer, because this business is now outstripping the Video Surveillance Market in terms of growth. Emerging technologies will continue to drive growth in Access Control in the mid-term.

However for their first acquisition HIKVision have selected to go for Pyronix an Intrusion Detection manufacturer that has achieved significant growth in the last five years; Albeit in an areas that has by far the slowest growth rate of all of the three sectors of the physical security business. Hikvision can open up the China market for Pyronix products and grow their business fast.

Jiang Feng Zhi, recently appointed chairman of Pyronix, commented on the acquisition: “These are exciting times for Pyronix and Hikvision as the two companies work together. Hikvision has plans for significant investment in the UK and particularly in its UK-based manufacturing, with plans to dramatically expand operations. We are delighted to welcome Pyronix to Hikvision group, and we look forward to growing the business through introduction of intruder alarm products to the global market.”

A small step for Hikvision but potentially a major one for Pyronix, who could begin to play a prominent role in the intrusion detection business.

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