In this Research Note, we examine Motorola Solutions Video Security and Access Control business based on their Q1-2022 financial results, investor presentations and M&A. Our analysis of two recently acquired companies, Calipsa and Videotec, brings Motorola's deal count up to eight acquisitions in this segment in less than four years.

Motorola announced its Q1 results on 12 May 2022, with Video Security and Access Control sales of $307M up 21% compared with Q1 2021.  

In Q1, the company also closed the acquisition of Ava Security, a London, UK-based provider of cloud-native video security and analytics software for $387M net of cash acquired. Given the number of subsidiaries under the Ava Security Ltd umbrella, it is difficult to establish an accurate consolidated revenue figure for the group. Still, it is evident that the deal represents a very healthy exit multiple for their investors and management.

The fast-growing startup was founded as Ava Cyber in 2016 and Ava Video in 2018 followed by a merger of the two companies in 2020. Ava Security announced a year of triple-digit growth in 2021, covered in our previous 4^th March report: Exploring Motorola‘s Acquisition of Ava Security and 2021 Financials. A press release from last month states that since the Motorola acquisition, Ava Cyber has been divested from Ava Security, and rebranded as Qush.

In April 2022, Motorola Solutions announced the acquisition of Calipsa, a London, UK-based provider of cloud-native advanced video analytics software for $40M.  Calipsa’s scalable platform enables businesses to optimize security with AI-powered analytics that verify alarms, enable content-based searches, detect tampering and assess the health of cameras in real-time. 

Calipsa Ltd. was established in London in 2016, founded by a team from Cambridge, University, College London (UCL) and Imperial College Universities. They saw the burden that false alarms place on the security industry and believed they could make a difference to crime prevention through applying AI technology.

Calipsa’s technology has been developed into a cloud-based remote video monitoring platform that uses machine learning technology to reduce the number of video alarms and identify false alarms in real-time. With false alarm reduction of over 90%, the company claims to be the global leader in its sector, working with clients internationally. 

The firm protects over 20,000 properties in 14 countries covering a range of industries such as agriculture, construction, manufacturing, logistics, automotive, retail, and others. Target clients are video monitoring stations and enterprise security teams in a corporate, education or healthcare setting. Clients include Prosegur USA, G4S UK, Securitas UK and Spain.  Their integration strategy with VMS platforms of major players such as Milestone Systems and Tyco supports their expansion into the enterprise security market.

Although Calipsa is operating in a very crowded video analytics market, we believe that their focus on false alarm reduction strongly positions them to capitalize on the current trends in the security market. 

In May 2022, Motorola Solutions acquired Videotec, an Italian provider of ruggedized video security solutions for $22M, net of cash acquired. Videotec’s fixed and pan, tilt and zoom (p/t/z), and explosion-proof cameras are said to be designed to withstand the extreme conditions and hazardous environments of critical infrastructure, specifically ports, energy, and transportation, where video security is imperative.  The acquisition of Videotec complements Motorola Solutions’ line of fixed video cameras, expanding its portfolio for the demanding environments of critical infrastructure.

Videotec‘s 2021 financial statements filed at the Vicenza Business Register reported 91 employees and revenue of around €17.4M. The deal, therefore, represents a revenue exit multiple of around 1.2x.

With these deals, Motorola Solutions is executing its growth strategy in end-to-end video security solutions and augmenting its Avigilon leadership position in the video security hardware and software market.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.