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The Physical Security Business in 2012

This Report is the NEW 2012 Definitive Resource for Physical Security Market Research & Investment Analysis.

Why do you Need this Report?

  • Gain insightful information about this business for your strategic planning exercises across 3 main product segments - Access ControlVideo Surveillance (CCTV) and Intruder Alarms.
  • Discover the valuations and exit multiples paid for security companies. What is driving M&A and Investment in this business?
  • Understand how technology is influencing this industries future and the effect it will have on your business and investments.
Learn how the industry is reforming in order to develop new security products and systems which will satisfy the end users need to reduce operating costs and move security from a cost center to one that delivers a Return on Investment. Review the Future of Emerging Technology Drivers. The shift from analog to IP has accelerated through the recession, as both manufacturers and consumers focus their spending on technology that can be scalable and deliver IT Convergence to meet existing and future requirements. Game changing technologies which are expanding future business opportunities include; Wireless, Video Surveillance as a a Service (VSaaS) and Managed Video (MVaaS), Situational Awareness technology including Analytics, PSIM and PIAM. There is an enormous latent demand for physical security products waiting to be exploited in the emerging markets of the world. China for example currently has a penetration of one sixth of the USA but this stood at one tenth in 2011, so the Chinese market is growing rapidly by using up this latent potential. World Penetration of Physical Security Products
Within its 186 pages and 19 charts and tables, the report sieves out ALL the key facts and draws conclusions, so you can understand what is shaping the future of the physical security industry;
  • The total value of the world’s security equipment market at factory gate prices in 2012 was $20.57 billion. Of this Video Surveillance products at $10 billion took a share of 49%. The developed markets of North America and Europe are losing market share to Asia and particularly China which will be the largest single market before the end of this decade.
  • The physical security industry in the first half of 2012 has well outperformed what most stakeholders had forecast despite setbacks in economic fortunes. We expect this to continue for the rest of the year. The continuation of the growth in 2011 has been driven by a combination of factors including strong growth in IP Video Networking products, buoyant markets in Asia and higher levels of penetration in vertical markets such as transport, retail and health and education.
  • Whilst technology has been the enabler of change, the driver and motivator is now clearly to deliver products and services that increase productivity and provide a better Return on Investment and reduce the Total Cost of Ownership. This has helped to convert physical security from a cost center to a profit center.
  • Strategic buys within the industry have been the main driver for consolidation in 2012 but its impact is down on 2011 and this trend may well continue as companies from the ICT and Defense business and Private Equity Companies make further forays into the Security Industry.
  • The value of merger and acquisition deals in 2011 was $9.847 billion a rise of 23% over the previous year, but in 2012 it declined to $7.168 billion a fall of 27%. Poor economic trading conditions reduced the confidence of major suppliers to go for growth through Merger and Acquisition. However we don’t expect this to continue and forecast a steady annual growth rate in M&A deals of 6.5% over the next 5 years to 2017.
  • For the period from September 2011 to August 2012 we identified 18 arrangements by VCs in the physical security industry having a total investment of $267 million. This is almost double the investment made in 2010 and 2011. Clearly VCs are much more confident of investing in the physical security industry. The majority of these involved investment in US based companies by US based venture capitalists.
For only USD $999 this report provides valuable information into how physical security companies can develop their business through merger, acquisition and alliance.
Who Should Buy this Report? The information contained in this report will be of value to all those engaged in managing, operating and investing in physical security companies (and their advisors) around the world. In particular those wishing to acquire, merge, sell or find alliance partners will find it particularly useful.

Table of Contents

  • Preface
  • Executive Summary
    1. Introduction
    2. Size, Structure & Shape of the Business
      • 2.1Market Size & Forecast to 2017
        • 2.1.1 Market Size & Distribution in 2012
        • 2.1.2 Market Forecast to 2017
        • 2.1.3 Market Size & Trends by Vertical Sectors
        • 2.1.4 Market Penetration by Region
      • 2.2 Structure of the Business
      • 2.3 Market Share
      • 2.4 Channels of Distribution & their Restructuring
    3. Growth Drivers & Motivators of Change
      • 3.1 IP is the Most Influential Driver of Growth
      • 3.2 Improved Performace, ROI & Reduced TCO
      • 3.3 Focus has Intensified Competition & Delivered Better Products
      • 3.4 Extending Focus through Joining the Horizontal Layers Independently or by Alliance
      • 3.5 Integrating Access Control with Identity Management & Video Surveillance
      • 3.6 New Industry Verticals, Shared Intelligence & Voice of Society
    4. Reviewing the Future of Emerging Technology Drivers
      • 4.1 Wireless Technology
      • 4.2 Video Surveillance as a Service (VSaaS) and Managed Video
      • 4.3 Video Technology, IP Cameras & HDCCTV
      • 4.4 Storage, Standards & Mobile Apps
        • 4.4.1 Storage
        • 4.4.2 Standards
        • 4.4.3 Mobile Apps
      • 4.5 Security Analytics, PSIM & PIAM & Situational Awareness Platforms
        • 4.5.1 Security Analytics
        • 4.5.2 PSIM & PIAM
        • 4.5.3 Situational Awareness
    5. What is Driving Consolidation?
      • 5.1 Internal Strategic Acquisitions
      • 5.2 External Buys – Defense / IT & Communications Related Companies
    6. M&A Performance / Valuation 2012 & Forecast to 2017
      • 6.1 The Progress of Consolidation & Outlook to 2017
        • 6.1.1 M&A Activity Declines in 2012
        • 6.1.2 Forecast of M&A Business to 2017
        • 6.1.3 M&A Analyzed by Business Segment
      • 6.2 Valuation – Exit Multiples & Drivers
        • 6.2.1 Performance of Exit Multiples 2005 – 2012
        • 6.2.2 Technology / Value Add Solutions – Impact on Valuation
      • 6.3 Strategic Buys Dominate Whilst IPOs & Management Buy Outs Disappoint
      • 6.4 Why M&A Should Play a More Important Role in the Next 5 Years
    7. The Investment Market
      • 7.1 The State of the Investment Business & Exposure to the Security Industry
        • 7.1.1 Impact on the Security Industry
      • 7.2 Investors in the Security Industry & Recipients
    8. Identifying Potential Merger & Acquisition Targets
      • 8.1 Potential Acquisition Targets
      • 8.2 Business Opportunities in the Fastest Growth Markets
        • 8.2.1 The IP Video Industry
        • 8.2.2 Security Management Software
        • 8.2.3 Video Surveillance as a Service
        • 8.2.4 Access Control, Biometrics & Identity Authorization
    9. Alliances Plays a Major Role in Delivering Customer Value Proposition
    10. Redefining Business Models

  • A 1.1 – Listing of Venture Capital Companies & Their Security Investments
  • A 1.2 – Acquisitions & Funding Announced in 2011 / 12
  • A 1.3 – Potential Acquisition Targets 2012 / 13
  • A 1.4 – The World’s Major Security & Safety Companies

List of Charts and Figures

  • Fig 2.1 – World Sales of Security Products 2012
  • Fig 2.2 – World Distribution of Security Products by Major Regions 2012
  • Fig 2.3 – World Sales of Security Products 2008 – 2017 ($BN)
  • Fig 2.4 – Market Size by Building Type / Vertical Sector (2006 & 2012)
  • Fig 2.5 – Comparison of Physical Security Penetration by Major Region 2006 & 2012
  • Fig 2.6 – Distribution of Sales by Major Grouping by Value 2012
  • Fig 2.7 – Distribution of Sales by Major Grouping by Number of Companies 2012
  • Fig 2.8 – Average Revenue for Group A, B, C & D Companies ($M) 2012
  • Fig 2.9 – Distribution Channels for Video Surveillance 2006 & 2012
  • Fig 6.1 – Security Deals Completed from 2000 to 2012
  • Fig 6.2 – Forecast of Deals to 2017
  • Fig 6.3 – M&A by Business Segment 2012 (% of Total M&A Spend by Volume)
  • Fig 6.4 – Acquisition Valuation Benchmarks 2005 to 2013
  • Fig 6.5 – Growth through Digital IP Technology
  • Fig 6.6 – The Physical Security Value Chain

List of Tables

  • Table A 1.1 – Listing of Venture Capital Companies & Their Security Investments
  • Table A 1.2 – Acquisitions & Funding Announced in 2011 / 12
  • Table A 1.3 – Potential Acquisition Targets 2012 / 13
  • Table A 1.4 – The World’s Major Security & Safety Companies