Avigilon gets into access control, buys RedCloud for $17 million

VANCOUVER—In a $17 million cash purchase, high-definition surveillance provider Avigilon Corp. on May 30 announced it acquired privately held RedCloud Security, a provider of Web-based physical and virtual access control systems.

Alexander Fernandes, Avigilon CEO, told Security Systems News that the purchase is a “nice tuck-in” that is “low risk [but] very strategic.”

Avigilon purchased the entire RedCloud business and expects it to be “neutral to 2013 earnings and accretive to 2014 earnings,” he said. Terry Neely, founder of RedCloud, will continue to lead the access control development team.

The deal brings Avigilon into the “$6 billion adjacent addressable [access control] market, which is fairly substantial,” Fernandes said. “Fairly often [specifications indicate that an] access control solution should be fully integrated into the video … and this [acquisition] gives us the competitive advantage.”

Avigilon plans to invest more R&D into RedCloud. Fernandes expects that the products will be fully integrated next year.

Fernandes said RedCloud has an “ideal profile” as a product platform for Avigilon. “It's an IP-based solution, which is not all that common,” he said. Avigilon was attracted to the product's “more modern design topology, versatility and the passion that Terry [Neely] brings.”

The patented RedCloud system is open and has the ability to work easily with IT systems, he said.

In a previous statement, Fernandes said RedCloud “easily combines physical security and identity management. This helps organizations manage who can come and go from their facilities from one platform as opposed to separate systems that can lead to added costs and complexity.”

Avigilon's head office has run on RedCloud for more than a year, he said.

The possibility of Avigilon making an acquisition outside of video, and in access control specifically, is something Fernandes spoke to SSN about during an interview last fall.

Neely is a former vice president of engineering at Honeywell Access Systems. He has 25 years of experience in databases, networking and physical access control.

RedCloud has a foothold in large corporate and education verticals. Neely said in a statement that RedCloud will tap Avigilon's resources, global sales channel and team to “accelerate the expansion of our product road map and move the industry toward an integrated approach for IT and physical security."