The Best and Worst Performing Security Stocks of 2020
While the coronavirus ravaged the economy for much of the year, publicly-traded electronic security companies nevertheless proved mostly resilient in 2020.
2020 M&A Overview
Transaction activity throughout the physical and cybersecurity space remained robust throughout 2020. The following highlights some of 2020’s marquee deals by industry sector.
Access Control
- General Security, a nationally recognized security provider specializing in the design, installation and service of security systems for residential and commercial clientele, acquired Triad Security Systems. The acquisition allows General Security to create a fully staffed New Jersey branch offering additional commercial technologies focused on access control, fire alarms, intrusion protection, video surveillance and intercom/entrance systems.
- Genea, a provider of Cloud-based software solutions for the commercial real estate industry, acquired Cloud-based physical access control company, Sequr. The acquisition allows Genea to integrate its software with properties’ existing hardware to enhance access control functionality and offer more cost-effective solutions, particularly for its HVAC and submeter billing customers.
Alarm Monitoring
- Securitas acquired FE Moran Security Solutions, a top alarm monitoring and electronic security systems integration company. The acquisition increases Securitas’ density and offerings in the United States’ Midwest region and is aligned with Securitas’ ambition to double the size of its security solutions and electronic security business.
- Per Mar Security Services, the parent company of Midwest Alarm Systems, acquired GT Fire & Security to continue expanding its market share in the Midwest region.
- Alarm.com acquired Shooter Detection Systems, a developer of gunshot detection systems, which through its innovative gunshot detection technology and network of systems integrators, detects and transfers information regarding any possible shooting incidents. Alarm.com’s suite of interactive security solutions, when combined with SDS’ advanced technologies, will enable Alarm.com to offer improved level of safety and security solutions for commercial enterprises.
Cybersecurity
- Atos acquired managed security services provider Paladion to bring key managed detection and response (MDR) capabilities to its existing platform as Atos customers continue to adopt hybrid and multi-Cloud transformation strategies for their organizations. The acquisition also provides global expansion with the addition of four security operations centers (SOCs) in the U.S., Middle East and India. Additionally, it will enable the creation of the next generation of Atos’ prescriptive SOC offering by integrating Paladion’s AIsaac AI platform for cyber analytics and hybrid SecOps.
- Professional Datasolutions acquired Control Scan, a managed security services and Cloud-based solutions provider whose capabilities include endpoint security, threat management, security information and event management (SIEM), and payment card industry (PCI) compliance.
- Accenture acquired the Symantec Cyber Security Services business from Broadcom. The acquisition includes Symantec’s managed security services and SOC operations and enhances Accenture Security’s position as one of the world’s leading providers of managed security services.
- CrowdStrike acquired Preempt Security, a provider of zero-trust and conditional access technology for network threat prevention. The company plans to integrate Preempt Security’s technology into Falcon, CrowdStrike’s Cloud-native endpoint protection platform.
- Fortinet acquired security access service edge (SASE) Cloud platform company Opaq Networks. The two technologies integrate to form a SASE solution with true zero-trust access and security by providing industry-leading next-generation firewall (NGFW) and SD-WAN capabilities, web security, sandboxing, advanced endpoint, identity/multifactor authentication, multi-Cloud workload protection, Cloud application security broker (CASB), browser isolation and web application firewalling capabilities.
- Watchguard Technologies, a global provider of network security and intelligence, secure WiFi and multifactor authentication, acquired advanced endpoint protection provider, Panda Security. The combined entity will allow customers to benefit from advanced threat detection and response functionality fueled by modern AI capabilities, behavior profiling techniques, and security event correlation, as well as additional operational benefits such as centralized management across network and endpoint security.
Systems Integration
- ADT Commercial acquired fire, life-safety and security provider and integrator CLS Technology to further deepen its capabilities to serve mid-market, national, and largescale commercial customers in the Houston area.
- Mobile Communications America (MCA), a provider of voice, video and data solutions that enhance the safety, security and operating efficiency of workplaces acquired CodeLynx, a security systems integration and custom software engineering solutions provider. CodeLynx offers MCA a robust security profile of access control, video surveillance and intrusion detection with a complementary software division for governance, risk and compliance.
- Strategic Security Solutions (S3) acquired Intelligent Security Integrations, a provider of security systems, access control systems, as well as on-premises and Cloud-based solutions, to expand into the Southeast market and leverage the company’s existing client relationships.
Value-Added Distributors
- Brixey & Meyer Capital acquired Access Control Systems, value-added distributor, systems integrator, and access control installer that includes high-end residential and commercial automated gate systems, parking control systems, commercial security systems and surveillance systems.
- Tech Data acquired technology distributor and IT services provider Innovix. In addition to expanding Tech Data’s presence in the APAC region, the addition of Innovix strengthens the company’s end-to-end solution capabilities in Cloud security and endpoint offerings.
- Wayside Technology Group acquired CDF Group, a U.K.-based Cloud, software and IT distributor and services provider. CDF Group works closely with its vendors and VARs, distributing a portfolio of software solutions across a variety of industries, providing Wayside with ample cross-sell opportunities for their existing customer base.
Video Surveillance
- Motorola acquired Pelco, a designer, developer and manufacturer of professional video surveillance and security system products and technologies. The purchase is one of many rapidly growing video surveillance acquisitions made by Motorola as it looks to solidify its position as one of the industry’s largest vendors. The company plans to revamp Pelco’s product portfolio to leverage Motorola Solutions’ industry-leading video hardware and analytics technology.
Thomas McConnell is a Managing Director of investment banking firm Capstone Headwaters where he focuses on mergers, acquisitions and capital raise transactions in the physical and cybersecurity industries. Brynne Vernon serves as an investment banking associate at the company.
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