The Best and Worst Performing Security Stocks of 2019

On the whole, publicly-traded electronic security companies turned in a very positive 2019. Despite some laggards, the sector proved consistent with the rising broader economy.

The Best and Worst Performing Security Stocks of 2019

2019 M&A OVERVIEW

Transaction activity throughout the physical and cybersecurity industries remained robust throughout 2019. The following highlights some of 2019’s marquee deals by industry sector.

Alarm Monitoring

  • ADT (NYSE: ADT) acquired I-View Now, an alarm verification technology provider that aims to reduce false alarms. The acquisition differentiates ADT from other alarm monitoring companies by providing its subscribers with a better quality product portfolio.

Access Control

  • Netherlands-based Gemalto was acquired by Thales Group for $6.7 billion (ENXT-PA: HO) in a deal that creates one of the industry’s largest digital identity and security companies. The combination creates an 80,000-employee company and bolsters Thales’ airport security and identity management initiatives.
  • Tailwind Capital completed its purchase of Banner Solutions from High Road Capital Partners. Banner Solutions, a privately held wholesaler of door hardware, electronic access controls and security products, had recently completed its fourth acquisition since October 2017.
  • Dormakaba Holding AG (SWX: DOKA) acquired Chino, Calif.-based Alvarado Manufacturing for an undisclosed sum. The deal expands Dormakaba’s customer base and provides the company a locale for producing a variety of physical access solutions in the U.S.
  • HID Global, a subsidiary of Swedish giant ASSA ABLOY AB (OM: ASSA B), acquired the International Identity Solutions business of De La Rue (LSE: DLAR) in a $53.4 million transaction. The deal further extends the parent company’s global market coverage and strengthens HID’s Citizen Identity Solutions business.

Value-Added Distributors

  • Anixter has announced plans to be acquired by Wesco Int’l (NYSE: WCC) for an estimated $4.5 billion, negating a previous $3.8 billion offer from private equity firm Clayton, Dubilier & Rice.
  • CDW Corp. (Nasdaq: CDW) acquired Toronto-based Scalar Decisions, an IT security consulting firm focused on infrastructure and Cloud solutions. The addition of Scalar provides CDW’s Canadian business arm with 350 employees and broadens the company’s professional and managed services expertise.
  • Irvine, Calif.-based technology distributor Ingram Micro completed its acquisition of Abbaken France for an undisclosed amount. Abbaken provides Ingram Micro with an expanded distribution supply chain of computer software solutions for security and cybersecurity.
  • Insight Enterprises (Nasdaq: NSIT) acquired multivendor IT distributor PCM for $581 million in a deal that combines two of CRN’s top 500 Solution Providers. The PCM addition expands Insight’s footprint in the U.S., Canada and the United Kingdom.

Cybersecurity

  • VMWare (NYSE: VMW) completed its $2.2 billion acquisition of CarbonBlack as part of the its new security business unit rollout.
  • Symantec completed the sale of its Enterprise Security business unit to Broadcom (Nasdaq: AVGO) for $10.7 billion, expanding Broadcom’s infrastructure technology offerings to include enterprise software and cybersecurity solutions.
  • Atos SE (ENXTPA: ATO) completed the acquisition of IDnomic for undisclosed sum. The deal makes Atos a major competitor in the digital identity management and Public Key Infrastructure solutions space.
  • Sophos Group (LSE: SOPH) announced it had received an offer to be acquired by Thoma Bravo in a deal that would be worth an estimated $3.9 billion. Sophos, a leading managed security and threat detection solutions provider, had a banner year in terms of deal activity, completing its third acquisition of Rook Security prior to the deal announcement.

Home and Building Automation

  • Vector Security acquired ADS Security for an undisclosed amount. The combined synergies of the two smart home and business security solutions providers is expected to create $20 million in additional recurring revenue and a subscribership of roughly 400,000 customers.
  • Ezlo Innovation acquired Centralite Systems through its financial sponsor MAVeCap for an undisclosed sum. The acquisition expands Ezlo’s product suite of smart home and business solutions by integrating Centralite’s wireless connection and control device technology.
  • ADT (NYSE: ADT) acquired LifeShield, a provider of DIY home security systems, for $25 million. The acquisition provides ADT a product offering and technology base that spans various smart home devices such as door locks, smart plugs and thermostats.

Systems Integration

  • Completing its second of five total transactions in 2019, private equity backed electronic security integrator Convergint Technologies acquired Security Solutions & Management (SS&M) for an undisclosed sum. The acquisition provides Convergint with SS&M’s physical security information management (PSIM) integration expertise in the military and commercial customer arena.
  • Allied Universal, a $7.1 billion revenue company backed by Warburg Pincus, acquired Securadyne Systems, a Dallas-based security systems integrator. The combination of the two companies creates a single company platform for providing tech-enabled systems integration services.

Video Surveillance


Thomas McConnell is a Managing Director of Denver-based investment banking firm Capstone Headwaters. He can be reached at (303) 951-7125 or via email at tmcconnell@capstoneheadwaters.com.

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