Just 15 months after being acquired by U.S.-based private equity firm Transom Capital Group, ownership of video surveillance industry stalwart Pelco changed hands once again on Monday, as Motorola Solutions announced that it had acquired the company for $110 million in cash.
The purchase is the latest in a rapidly growing number of video surveillance acquisitions made by Motorola since it completed its acquisition of Avigilon in April 2018. Since then, the company has added WatchGuard Inc. (July 2019) and completed its acquisition of IndigoVision in June.
“Video continues to play a more powerful role in enabling safer cities and securing businesses around the world,” Greg Brown, chairman and CEO, Motorola Solutions, said in a statement. “Pelco’s track record of innovation, internationally recognized brand, global channel and customer installed base enable us to further expand our global footprint with enterprise and public safety customers.”
According to Alex Asnovich, Head of Global Marketing, Video Security and Analytics at Motorola Solutions, the company has no plans to change the Pelco brand and says that it will function as separate brand under the Motorola Solutions’ Video Security and Analytics organization with its go-to-market operations remaining unchanged.
Asnovich adds that the company will, however, be remaking Pelco’s current suite of offerings. “Our plan is to revamp Pelco’s product portfolio to leverage Motorola Solutions’ industry-leading video hardware and analytics technology within the next year. We plan to manufacture these refreshed products in Texas,” Asnovich says.
According to Jon Cropley, Principal Analyst, Video Surveillance, for market research firm Omdia, the acquisition continues the trend of increased consolidation among video surveillance firms in recent years and makes Motorola one of the industry’s largest vendors.
“The world’s five largest vendors accounted for around 26% of the global market in 2012. This compares with around 50% in 2019,” Cropley explains. “Motorola clearly wants to be one of the world’s largest vendors. It has been on a video surveillance vendor acquisition spree. If revenues from these three companies (Avigilon, IndigoVision and Pelco) are combined, this would have made it the fourth largest vendor in the world in 2019.”
Jim McHale, Managing Director of Stockholm-based market research firm Memoori, called Transom’s decision to divest of the company after only a little over a year “intriguing” and speculated that the cash offer provided enough of a return to justify the sale.
Since being acquired by Schneider Electric for $1.54 billion in 2007, Pelco, an industry giant when the market was still dominated by analog solutions, has seen its value plummet, much of which McHale attributes to their slow adoption of IP.
“Schneider Electric actually has a good record of acquiring building services companies and successfully integrating them into their building automation business, but it proved not to be the case with Pelco,” McHale explains. “Video surveillance is a more innovative and competitive business than building automation and they failed to catch up before the ‘race to the bottom’ hit them, and they didn't invest early enough in IP video.”
