Speaking before a packed auditorium at the 10th annual Milestone Integration Platform Symposium (MIPS) in Las Vegas on Tuesday, Milestone Systems President and CEO Lars Thinggaard said that Canon’s acquisition of the company last summer would only serve to strengthen the open platform video management software firm by opening up a wealth of resources that they can tap into moving forward.
Although he couldn’t share insights about the initial public offering (IPO) that Milestone had been planning prior to Canon’s purchase of the company last year, Thinggaard on Tuesday did discuss their thought process and how they arrived at the decision that partnering with Canon would result in a better outcome than going public.
“The night before I went onstage at the MIPS show in Florida last year, Sky News in London revealed the rumor with a headline that was ‘Big Brother CCTV firm joins city IPO frenzy.’ That is not a really great headline, in particular, as you don’t want anything to go out at that point in time. I can tell you that that was very inconvenient,” he explained. “There is a lot of legal confidentiality to these processes as you know, so I could not go out and confirm anything.”
Thinggaard said that the company was, in fact, determined to go public but that there were some poignant questions raised by Canon Europe CEO Rokus van Iperen when discussions first began between the companies last April, which had to be taken into serious consideration. He said that Milestone had been planning how to achieve long-term, sustainable and profitable growth, as well as further invest in building out their ecosystem.
When asked by van Iperen why they really wanted to go with an IPO, Thinggaard said that there was silence on his end of the phone other than to say that “the train had, more or less, left the station.” However, when the management team and board of directors sat down to weigh their options; they had to determine whether or not they wanted to go it alone or whether they wanted a partner.
“During that period of thinking about the future of this company, we questioned whether or not we were doing the right thing here. Two things were paramount for succeeding in making an acquisition: First and foremost, preserving the ecosystem in conjunction with a camera company and secondly, to protect the open platform,” said Thinggaard. “These were two pivotal and basic principles that we wanted to apply to the way the structure of an acquisition would look. As we learned Canon’s vision for the future, we got to understand that that was a possibility for us.”
Perhaps most importantly, Thinggaard said that Milestone will remain a stand-alone company and that its’ open platform will remain unchanged. He drew an analogy between Google’s acquisition of Android where the openness of the smartphone operating system was maintained and how Milestone will remain an open VMS for the surveillance industry under Canon.
“Canon understands the open platform and remember the prerequisites of the deal – preserve the open platform- and the way that we are working with Canon is as a stand-alone company,” added Thinggaard. “We have built Milestone to be the top global VMS for the last six years. With Canon we get fast access to resources to build the greatest position of strength.”
While Thinggaard spoke candidly about Canon and the decision to opt for acquisition rather than grow the company through an IPO, he refused to comment on the imaging giant’s recent bid to acquire Axis Communications and the implications that could potentially have on Milestone.
“A lot of people have asked me about Canon’s offer to buy Axis. This is something, of course, that is possible but it is an offer, not a purchase yet,” he told attendees. “I want to keep the focus here at MIPS on you our partners and not on Canon and Axis. They are great partners of ours, but I do not want to add to speculation and I want to close that discussion as of now.”
In an interview with SIW, Thinggaard said that the prerequisite that Milestone operate as a stand-alone company means that the firm, including its board of directors and leadership team, has remained intact.
“We are run as a standalone (company) with regular updates and meetings as we did before with the same board and so on and then, of course, we have fiduciary responsibilities for reporting numbers to Canon, but apart from that our business is untouched,” he said.
Thinggaard also said that the perception in the marketplace that hardware companies may not want to work with Milestone in light of the Canon deal is also unfounded as the company has increased the number of camera vendors they integrate with since the acquisition was announced – from roughly 130 manufacturers to over 140 currently.
“If anyone believed that because of Canon we were then prevented from making more drivers for new camera manufacturers, it’s not the case,” said Thinggaard.
Thinggaard, who has already had several meetings with Canon Chairman and CEO Fujio Mitarai, said that Milestone has been welcomed into the company with open arms.
“I have really appreciated the reception Milestone has been welcomed with in Canon,” he said. “When it comes to the why Canon question, it is the world’s largest imaging company. They want to be big and clearly that shows with recent events. They see a great opportunity with security.”
