Motorola Solutions entered into a definitive agreement to acquire Avigilon in an all-cash transaction that will enhance Motorola Solutions’ portfolio of mission-critical communications technologies.
Under the terms of the agreement, Motorola Solutions will acquire all of Avigilon’s outstanding shares for $27 per share. The enterprise value of the transaction is approximately $1 billion, including Avigilon’s net debt.
Based in Vancouver, British Columbia, Avigilon designs, develops and manufactures advanced security surveillance solutions, including video analytics, network video management software and hardware, surveillance cameras and access control solutions. Avigilon products are used by a range of commercial and government customers including critical infrastructure, airports, government facilities, public venues, healthcare centers and retail. The company holds more than 750 U.S. and international patents.
Rumors about a possible Avigilon acquisition have been circulating for years, said Jon Cropley, principal analysist, video surveillance, IHS Markit, although most people expected the acquiring company to be one of Avigilon’s competitors. “Motorola's focus on public safety projects is likely to have been a major motivation for the acquisition,” Cropley said. “City surveillance is an important element of public safety. Professional video surveillance equipment revenue has been growing faster in the city surveillance sector than in the rest of the market in recent years. IHS Markit forecasts this will continue, with the city surveillance sector growing at a compound annual growth rate (CAGR) of 11.1 percent to 2021 — and the total market growing at a CAGR of 6.8 percent.”
Cropley said it’s clear that Motorola is aiming to increase activity in the wider public safety and “safe city” market, moving beyond its emergency communications focus of the past.
“This acquisition will bring Avigilon’s advanced video surveillance and analytics platform into public safety, while expanding our portfolio with new products and technologies for commercial customers,” said Greg Brown, chairman and CEO, Motorola Solutions. “Video can play a powerful role in creating safer cities and thriving businesses. It can serve as highly efficient ‘eyes and ears’ for monitoring a given location, and advanced video analytics can proactively alert officials to a perimeter breach or quickly find a person who left behind an object of interest.”
As more cameras feed into public safety workflows, video surveillance and analytics will enable more public-private partnerships between local communities and law enforcement, Avigilon said in a press release. The acquisition will also enable Motorola Solutions to extend into new segments of its commercial markets business, which provides secure, reliable communications technology to industries such as oil and gas, transportation, utilities, manufacturing and higher education. Customers will now be able to purchase advanced security and surveillance solutions as part of Motorola Solutions’ portfolio of critical communications technology for commercial markets.
Avigilon’s video surveillance platform helps transform video from reactive — looking back at what has taken place — to proactive, issuing alerts in real time when a person, object or vehicle of interest is detected. This critical intelligence enables users to take the right action more quickly.
“We’re very pleased to be joining Motorola Solutions, as their vision and strategy aligns fully with our own,” said Alexander Fernandes, Avigilon’s founder, chief executive officer and chairman of the board. “This combination will bring new opportunities to Avigilon, allowing us to accelerate our innovation and provide even more value to our customers.”
Motorola Solutions has sufficient capital resources, including cash on hand and available commercial credit facilities, to complete the transaction. The transaction is expected to be completed by the end of the second quarter of 2018, subject to customary closing conditions, including regulatory, shareholder and court approvals.
The transaction is structured as a statutory plan of arrangement under the Canada Business Corporations Act. The transaction has the unanimous support of the Special Committee of the Avigilon Board, as well as Avigilon’s full board. Shareholders representing approximately 12 percent of the issued and outstanding common shares of Avigilon have already agreed to support the transaction.