FLIR Systems on Monday announced that it has acquired video surveillance hardware and software provider DVTEL for approximately $92 million in cash.
In a statement, FLIR said the merger of the companies would enable it to become an end-to-end security system provider with solutions tailored to meet the needs of each individual market from consumers to large-scale enterprises.
"FLIR's strong position in thermal imaging together with DVTEL's extensive video analytics and VMS capability will position us well to offer differentiated and highly accurate perimeter security solutions for the upper corner of our security segment's product value ladder," said Andy Teich, president and CEO of FLIR. "DVTEL adds a suite of professional-grade security software and hardware that is very complementary to our current solutions and fits very well with our strategy to offer end-to-end solutions in the enterprise and infrastructure segments of the security market."
Over the past two years, the security industry and the video segment, in particular, have experienced increased consolidation with Canon’s purchase of Milestone Systems and Axis Communications being the two biggest. Other notable acquisitions since the beginning of 2014 include: Vicon’s purchase of IQinVision; OnSSI’s acquisition of SeeTec; and Panasonic’s purchase of Video Insight. Despite this increased consolidation, Jon Cropley, principal analyst for video surveillance and security services at IHS, said that the industry remains incredibly fragmented with the fifteen largest vendors accounting for just 52 percent of market revenues in 2014.
“Nevertheless, average camera and recorder prices have been falling rapidly putting pressure on vendor profits. For example, IHS forecasts that the global average price of a network camera will fall by over 18 percent in 2015,” said Cropley. “At the same time, vendors like Hikvision and Avigilon that provide full system solutions, have been gaining market share (Hikvision's share increased by five and a half percent between 2013 and 2014). Where three years ago the industry was looking at 'best of breed' and integrated systems from multiple vendors, the market data suggests single vendor solutions are now often preferred.”
Given this preference for end-to-end solutions from a single vendor, Cropley expects the industry to further consolidate moving forward.
“These developments are likely to drive future consolidation as specialists are highly sought after to differentiate total solution providers offerings,” said Cropley. “Interestingly we now have an increasing amount of formerly independent specialist vendors who are now part of a wider solution but claim to remain committed to open platforms - the question is will this last?”
