Last month, Access Control Related Enterprises, LLC (ACRE), the parent company of Vanderbilt and ComNet, announced that it had agreed to sell OEM access control hardware maker Mercury Security Products to HID Global for an undisclosed sum. The acquisition will further consolidate the grip of HID and its parent company, Assa Abloy, on the access control market, pairing Mercury and its install base of three million controllers with HID’s readers and credentials.
Joseph Grillo, CEO of both ACRE and Vanderbilt, characterized the sale as a strategic move for ACRE, which, by its very nature as a private equity-backed business, looks to acquire, grow and sell companies within varying timelines.
“Over the years, there have been a number of inquiries that have come in about Mercury,” Grillo says. “At a particular point in time, roughly a year or so ago; it created a situation where the board (of ACRE) figured they should at least explore strategic possibilities.”
In addition, while he said that Mercury is a “tremendous” company, nearly doubling in size and maintaining a “high level” of profitability in the four years it has been owned by ACRE, Grillo explained they had a different business model – selling OEM products to other well-known manufacturers – from the rest of ACRE’s portfolio.
“It’s a very different business model from the other parts of ACRE – the Vanderbilt business and the ComNet business – which while they operate in different product segments, they share customers and channels to market and there was a bit of a baked-in channel conflict as Vanderbilt was a Mercury customer as well as having the same owner.” Grillo says. “If you look at that and the future you say, ‘well, maybe it’s a good opportunity if the market response is right and energetic,’ and it was to go ahead and divest an asset and perhaps look at reinvesting in the core Vanderbilt and ComNet brands and companies.”
Grillo says that Mercury will remain a technology partner and supplier of Vanderbilt and that being a part of the HID Global umbrella should bode well for them moving forward.
“I believe that Mercury is in a tremendous home,” he adds. “I go back 17 years ago when I was involved in selling HID to Assa Abloy and I thought HID was great company, growing, profitable, doing well, and when it got into Assa Abloy it just really flourished into something that was beyond my imagination. I believe that Mercury, positioned now within HID, will have access to tremendous resources, sales people, operations, and opportunities to embed its’ technology in their products in a way and with resources that ACRE couldn’t bring to Mercury.”
For their part, HID had no comment on its acquisition of Mercury beyond the press release that was originally issued about the deal.
“All of the information that we can share about the pending acquisition of Mercury Security is contained in the press release that was issued on September 19. The deal is expected to close in Q4. We don’t have any further information at this time, and it’s not appropriate to speculate,” HID spokesman Anthony Petrucci wrote in a statement to SecurityInfoWatch.com.
Jim Dearing, senior research analyst for security and building technologies at market research firm IHS Markit, says that the acquisition makes a lot of sense for HID given their prominence in providing readers and credentials and Mercury’s market position relative to the manufacture of controllers. Dearing says he is most intrigued about what the deal might signal for standards in the market going forward.
“It will be interesting to see if this means an even greater push toward more open standards. All the way back in 2012, HID and Mercury Security were two of the three companies (the other being Codebench, who were also acquired by HID back in 2013) that contributed to the specification of the OSDP (Open Supervised Device Protocol) standard,” Dearing says. “As the penetration rate of access control systems has grown so has the number of enterprises and institutions deploying different types of security systems across multiple sites and countries. This has led to a growing demand for open standards that ease integration between brands and different product types. End-users want to install access control systems that are able to communicate with their existing video or intrusion system without having to pay a third-party software provider to perform a lengthy integration.”
About the Author:
Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].
