business news Hikvision on the Pyronix acquisition: Hikvision has acquired the UK-based intrusion alarm security firm Pyronix. This marks the first Chinese acquisition of a substantial european security company. Detektor met up with Hikvision’s International Marketing director Keen Yao to discuss the acquisition. “Overseas business has become much more important for us. We were looking for this kind of experience with a local expert”, he says. “It was a very natural progression” On May 19th it was announced that Hikvision, the world’s largest video surveillance manufacturer, is acquiring Pyronix. The British intrusion alarm company is based in Rotherham, has about 200 employees and a 25 million pound turnover. For many people in the security industry, the acquisition came as a big surprise, but Hikvision has partnered with Pyronix for a couple of years. Keen Yao says: “We have worked in a special project together for two years, so we know each other well and then the owner of Pyronix came up with this idea and it was a very natural thing.” Dramatic expansion plans Julie Kenny founded Pyronix 30 years ago and will continue in a consultancy role. She commented on the acquisition: ”This acquisition represents a huge opportunity for Pyronix, Rotherham, and the region. The foreign direct investment that this will bring to the UK will be huge. Hikvision has big plans for the growth of Pyronix and the continued development globally. In the last 15 years Hikvision has demonstrated what can be achieved in the video surveillance market. With this guidance, Pyronix can achieve great things in the global market place.” She continues: “For the business it’s a big, big plus, it’s the right thing for the future. Technology is moving so quickly with the cloud and apps and so many large companies getting involved. We needed to be able to scale up quickly.” Keen Yao does not yet want to reveal exactly what kind of plan Hikvision has for Pyronix and which synergy effects the acquisition will bring. Jiang Feng Zhi, President of Hikvision Europe, and now chairman of Pyronix, said Hikvision has plans for significant investment in the UK and particularly in its UK-based manufacturing, with plans to dramatically expand operations. Detektor met up with Hikvision’s International Marketing Director Keen Yao to discuss the acquisition. The technology trend moves towards total solutions or combined systems. We think it is important to have different technologies. Looking for total solutions Hikvision is looking forward to growing the business through the introduction of intruder products to the global market and plans to apply the Pyronix expertise and know-how in intrusion detection systems to its video surveillance products. Sebastian Herrera, managing director of Pyronix, says: “Hikvision and Pyronix combined knowhow will bring new advancements and innovative products to the market, converging two security technologies in video surveillance and intrusions detection.” Why the acquisition of Pyronix and why now? Keen Yao indicates it is about differentiation. “The technology trend moves towards total solutions or combined systems. We think it is important to have different technologies”, he says. Some video surveillance manufacturers, for example Axis Communications, have entered the physical access control market in order to differentiate. According to Keen Yao, the reason why Hikvision decided to acquire an intrusion alarm company rather than an access control firm has to do with opportunities. “Yes, it was all about the opportunity. Now, we had this opportunity as we already enjoyed a good relationship with Pyronix. Similarly, if there is a good opportunity arising in the access control segment, we will consider it as well”, he says. Started to expand internationally 2006-2007 Pyronix will be the first Hikvision manufacturing factory outside of China. However, in an interview with Detektor magazine earlier this year, Hikvision stated that it would increase its international expansion, establishing a total of 25 branch offices and 3-5 local factories in the overseas market within a couple of years. Hikvision started to expand internationally in 2006-2007 and today, the international business is growing a little faster than that of the domestic market. Between 2009 and 2014, Hikvison had a CAGR of 53 per cent overseas and its overseas busi- ness constitutes for 26.5 per cent of the total revenue. From this perspective, it is not so surprising that Hikvision has acquired a European company. The Hikvision CEO and President, Yangzhong Hu, has stated that although Hikvision has always focused more on the technology and marketing rather than mergers and acquisitions, they will make the move when a good opportunity arises. Rapid growth in video surveillance Hikvison’s main focus will continue to be video surveillance. A report from IHS recently showed that Hikvision occupies 19.5 per cent market share for the global CCTV & video surveillance equipment market in 2015. Three years ago, Hikvision’s market share was 8 per cent – numbers that clearly illustrates the company’s rapid growth. Keen Yao believes growth will continue and he considers intelligent functions to be the biggest trend on the video surveillance market. “I think we have very good chances to continue to grow in the next five years. Not least thanks to the traditional security business and the convergence of intelligent technology that makes surveillance a natural part of the daily management for end users”. 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