Recent acquisition news reached the industry regarding the purchase by Infinova of Canadian based IP video specialists, March Networks.
The CDN$90 million acquisition, set to complete by April 2012, will see a combination of 2 industry heavyweights in their own right, join forces to make a seriously large force in the IP sector.
But is it a perfect union?
Looking at the proposed deal, there is a CDN$1.4 million ‘get out clause’……. applicable to either side…… whilst the precise details are not known, presumably it is more sided for Infinova – maybe a performance related condition to the sale becoming final? It would make sense as March have been very open about their various region performances and their aggressive plans to increase revenues throughout their business regions.
But what might it mean for the two companies?
Well, let’s take a brief look at what each do and offer:
Combining an established Retail and Banking customer base that was historically March Networks in Canada, with the IP intelligent video and software that Cieffe Srl in Italy provided, March have established a solid and leading innovator in IP technology – both in hardware and software.
Little is known about Infinova in the UK, their presence appears stronger in the US and the Far East. They appear to have a wide and varied product range of both analogue and IP based products.
Interestingly they have a range of HDCCTV products, something that March obviously do not have with their IP pedigree….that might be an interesting development to see which direction they promote the more heavy, or perhaps even simply look to industry lead in both?
So why the union?
Here are our thoughts and we must insist these are purely opinions!
1) Infinova want an established route to the EMEA market – something March has
2) March possibly OEM some existing Infinova kit and have been extremely successful with many of their IP cameras – this might have led Infinova to consider not only locking in their OEM sales with March, but also capitalise on the profit margins by benefiting from the final product sale?
3) March have an IP PTZ product range, an OEM they have with a European PTZ Dome manufacturer, Infinova also have a PTZ IP range, could this increase profit margins for both companies by using ‘in-house’ products? March were extremely successful with a large South African contract for PTZ domes running into the hundreds and it would be commercially viable for Infinova to want to gain a slice of that action – we have already seen that March are reducing their IP PTZ dome model range – presumably this is in preparation for the Infinova deal?
4) March are under increasing pressure from other leading IP software and hardware manufacturers and Infinova gives them another strong, US outlet for their range.
5) Acquiring March gives Infinova a credible IP route to market that perhaps they do not fully have at the moment?
As we said, these are only our opinions and not at all based on fact – it does appear, on the surface, to be a better deal for Infinova and a slightly strange deal for March – time will tell.
One thing is indeed for sure though, the market for acquisitions is still buoyant and that many companies now consider growth, in difficult economic conditions globally, is best reached through strategic mergers/acquisitions – maybe this is behind Infinova’s thinking?!