This is a research note from Blake Kozak, principal analyst for Security and Building Technologies at IHS Inc., providing insight on the recent acquisition of Allegion and SimonsVoss.
On the heels of the recent announcement that Kaba and DORMA would merge, comes the news that Allegion plans to acquire SimonsVoss from HgCapital. This latest merger would again reshape the access-control market in Europe, the Middle East and Africa (EMEA).
The merger of Allegion and SimonsVoss would immediately create the second largest company in the EMEA region, after the market leader, Assa Abloy. The merged Kaba and DORMA would then rank third in the region.
Note: This most recent merger still requires approval, by the German Bundeskartellamt, which prohibited a planned merger of Assa Abloy and SimonsVoss back in 2008.
SimonsVoss, the world?s largest supplier of digital cylinder locks, currently has limited penetration in the Americas, so this move will certainly help the company enter this highly competitive region. Furthermore, the acquisition will help create a more well-rounded portfolio for both companies.
IHS estimates that the majority of SimonsVoss revenues are generated from electronic locks and credentials, while Allegion has a more diverse portfolio that spans wall readers, panels, software, and electronic locks.
For the overall electronic access-control market, larger companies are starting to come together to provide seamless solutions, increase in-house expertise and expand the supply chain with a global focus. There have been many mergers in the past; however, most were regional and specific. We are now seeing many more high-value acquisitions that immediately affect market share rankings.
If access-control companies continue to merge and expand in this manner, the move toward more open standards may take a step backward, because end-users will have wider product ranges and greater expertise from a single source. Even so, IHS expects these types of acquisitions will continue, as suppliers bolster their positions, not only on a regional basis, but also to take advantage of end-user growth (e.g., residential, utilities, healthcare) and services (e.g., ACaaS and VSaaS).
It remains to be seen if video and access-control companies will cross over and provide a more fully integrated solution, or if companies will continue to enrich their current portfolios on a more linear path. One key acquisition strategy could be centered on capabilities and expertise across multiple disciplines.
It is becoming increasingly crucial for companies to have IT, software and platform expertise, in addition to equipment. These acquisitions will increasingly focus on helping companies expand beyond components.
About The Author:
Blake Kozak
Principal Analyst
Security & Building Technologies
IHS