Year of the acquisition continues

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09/12/2018

This week Security Systems News reported on the sixth acquisition this year for both Convergint Technologies and ADS Security, two companies that have been very active this year on the M&A front, representing a continuing trend in this “year of the acquisition.”

It turns out that the M&A landscape overall is very strong and will continue to offer opportunities for companies looking to acquire and for companies looking to be acquired, according to Imperial Capital.

During his keynote presentation, Finance and the Future for Cloud and Security, at the Cloud+ conference (more coverage on this to come), Sept. 5-6, 2018, in Delray Beach, Fla., Rick Juarez, managing director, Imperial Capital, provided a rosy M&A picture for the industry today and moving forward.

He noted in his presentation that the security M&A market remains steady across all three major subsectors—physical security, identity solutions and information security—with strong activity seen in 2017 and YTD 2018.

“In terms of the overall health of the M&A market, if you are a young company looking to get acquired, or if you are a more mature company, the good news is that there is still a demand out there,” he explained, pointing to a slide showing 2018 ahead of the past five years in terms of M&A activity. “Going into the second quarter of this year, it is one of the strongest years for M&A, so I think that if you have a good solution, it is a good time to really explore an out, as it is not always going to remain like this.”

As is the case with companies like ADS and Convergint, acquisitions have helped the companies bring on more talent, increase capabilities and expand service capabilities and reach, while helping to grow the overall bottom line.

Convergint, for example, has strategically grown its service footprint across the United States, Canada, Europe and Asia Pacific through strong organic growth and the completion of 20 acquisitions since early 2016.

In terms of overall growth, Convergint's CEO Ken Lochiatto told SSN that Convergint will finish the year with strong organic growth in the mid-teens percentage-wise. “And if you take that along with the acquisition activity, we should be north of a billion dollars by year’s end, which is very exciting when you consider that we finished last year at $840 million.”