The acquisition position

Posted On 02 Dec 2014
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Doubtful manOver the last few months we have seen two security divisions of household names be acquired. What does this mean for the industry and how does it reflect on the strength of the market?

In October it was announced that Vanderbilt Industries had acquired the business Security Products from Siemens and then at the end of November it was revealed that the purchase of Samsung Techwin by the Hanwha Group would be completed in 2015. Whether these came as total, out of the blue shocks to the industry or not it goes to show that the security industry is still seen as an attractive investment for some companies (it is estimated to grow by 10% over the next five years) while perhaps others are ready to move out of it to concentrate on other areas if the right offer comes along.

Both of the companies taking over the established manufacturers said that it would be business as usual at each of the organisations and this is likely to be the case, at least for the time being. Customers of both Siemens SP and Samsung Techwin will likely see no instant change because one of the reasons why established companies are acquired is for their market share including a database of existing clients, therefore there is no reason why immediate changes to operating practices will happen.

It will be interesting to see what changes are made concerning the branding of the new companies and how these sit with customers. In the case of the Vanderbilt purchase, the name ‘Siemens’ will not be transferring with the sale so the company will be known as Vanderbilt International from Day One; although the individual brands of Bewator, Cotag etc will continue to be used. As yet we have not heard about the naming of the new Samsung Techwin business going forward.

Takeovers are always tricky times for the employees of acquired companies and as both of these cases show, even household names can get taken over. Staff now find themselves going from what was probably perceived as a safe position at a global innovator to being an extension of a company that they had never heard of prior to the deal going public. Again both Vanderbilt and Hanwha have stated that no changes are planned. Cynics will have their own views…

So what does the purchase of two of the largest operators in the market mean for the industry? Well, as already mentioned, it means that this is still an attractive industry sector for businesses and with very large companies buying up established manufacturers, both with strong European sales, then it shows that the UK and its neighbours have customers that Hanwha (South Korea) and Vanderbilt (US) value and want to reach as quickly as possible. Much in the same way we have seen CCTV companies buying up access control companies; it is easier to buy the expertise rather than try and build it up. Given this thinking, the job security for UK staff should be strong.

The acquisitions also mean that both companies will see some investment in terms of marketing and R&D from their new owners, which should be good news for customers and partners.

Nothing is certain in business however so we await the developments of 2015.