Infinova goes public with IPO in China

Video surveillance products firm raises $300 million from IPO, plans for acquisitions, global expansion, R&D

Jan. 6, 2010 -- Video security products company Infinova has taken its business public. The company listed itself on Dec. 24, 2010, on the Shenzhen Stock Exchange (stock code 002528) in China with its initial public offering (IPO), and reports that on Jan. 6, IPO investments put the market value for the company at $1.2 billion.

Infinova is based in Monmouth Junction, N.J., but said the IPO was entered in China "because it is one of the top IPO markets globally."

Infinova CEO Dr. Jeffrey Liu said that they turned to the Shenzhen exchange for their IPO because "you go where the money can be offered to you. We felt like our kind of company we could get the best investment in the Chinese stock market. We wouldn't have been able to get that kind of P/E (price to earnings) ratio in the U.S. today."

The company says it has seen $300 million in proceeds from its IPO, and will use that to expand the company's marketing and global presence, in addition to growing research and development into new video surveillance products. Dr. Liu told the company saw $57 million (USD) in global revenue in 2009.

"We always have envisioned that one day that we would go to an IPO to tap the capital market to grow the company much faster," Liu said. "Like many companies, we started the company and built the brand slowly, developing high technology products."

Infinova as it currently exists has been around since 2000. Prior to that time, the company operated chiefly as a security products distributor that was founded in 1994. In the year 2000, Dr. Liu, who holds his Ph.D. in physics, reformatted the company into a security products manufacturer and introduced his first product, a matrix switcher. From there, the company expanded into fiber optic solutions and eventually to cameras. Today, Infinova produces a variety of video surveillance components, including analog, IP and megapixel surveillance cameras, fiber optic data transmission products, control room equipment such as matrix switches and video system control keyboards, recording equipment and a number of specialty products, including explosion-proof camera units.

With the funding, Infinova plans to expand both its global marketing and sales presence, but also its research and development efforts. The R&D team is not small, however, already employing 290 engineers, many of whom are in China but whose efforts are directed by the U.S. headquarters team in New Jersey.

That investment in the company itself helps drive the company's mission to be the "integrator's manufacturer", said vice president of marketing Mark Wilson.

"Infinova grew up in the analog industry and we've brought a lot of that experience over to our IP products. We understand that migration that our integrators are facing today. Companies financially can't write off their investments in their control room to jump to IP, so we try to create the bridge that they can cross. Part of our role is hand-holding, to help the integrators and their customers cross at their own pace."

Wilson said that the company's current size allows it to be very support focused and to even customize products for integrators when they are needed. He cited the example of an integrator in India that was handling a traffic surveillance project. The roadway was using a type of sodium lighting that created color variations in cameras. "A red car might look gray in front of sodium lighting. We were able to adjust the firmware in the camera so we could match the lighting. That's what we can bring to our customers," Wilson said.

"It's an adaptive engineering approach," Liu explained. "We can make those changes because we are relatively small, and we design and code every bit and piece in our product line. We own the firmware inside the products."

Besides using the new funding garnered through the December IPO on R&D expansions and to expand marketing, Liu said that they plan on making acquisitions where needed. The company has previously seen no acquisitions, shaping its growth entirely organically.

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