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Transaction
Case Studies

Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail [email protected] with your contact information.

Archives > Transaction Case Study 86

SOKOLOFF & COMPANY CASE STUDY
Motorola Solutions (NYSE:MSI) Acquires Avigilon (TSX:AV)

DATE ANNOUNCED:  February 1, 2018
BUYER:  Motorola Solutions (NYSE:MSI)
SELLER:  Avigilon (TSX:AVO)
PURCHASE PRICE: Enterprise Value of CAD$1.2 Billion.
FORM OF PURCHASE PRICE: (CAD$27 per share)

SELLER’S FINANCIAL INFORMATION AND M&A MULTIPLES
(all numbers are in Canadian dollars)

Year

2015

2016

Trailing Twelve Months
through
September 30, 2017

Revenue

$287.56M

$353.62M

$390.09M

EBITDA

$51.3M

$54.4M

$47.8M

Cash

 

 

$31.22M

Debt

 

 

$92.18M

Purchase Price

 

 

$1.2B

Enterprise Value

 

 

1.261B

Multiple of Revenue

 

 

3.23

Multiple of EBITDA

 

 

26.38

TRANSACTION DRIVERS
Avigilon’s founder Alexander Fernandes said: “This combination will bring new opportunities to Avigilon, allowing us to accelerate our innovation and provide even more value to our customers.”

Greg Brown, chairman and CEO, Motorola Solutions said “This acquisition will bring Avigilon’s advanced video surveillance and analytics platform to the rapidly evolving public safety workflow, while also expanding our portfolio with new products and technologies for commercial customers.”

SOKOLOFF COMMENTARY:
This was the right time for AVO to exit.  Avigilon was built on a foundation of technological innovation and excellent business execution, driven in great part by its founder CEO Alexander Fernandes.  Technology leadership can be quicksand, especially since AVO is a relatively small player in a red sea of competition.  Mr. Fernandes, who formed the company in 2004, announced he is retiring concurrent with closing of the transaction. 

During the last few years, AVO shares have appreciated at a rate less than any of the major indices.  Starting in November of last year, AVO began moving up and had the very good fortune of announcing the Motorola acquisition on February 1st, in front of the market correction which began shortly thereafter.  A shareholder acquiring a stake two years ago will see a 78% return, well above the DOW, NASDAQ and S&P indices.



The deal makes good sense for Motorola as well.  Since spinning off from Motorola Mobility in 2011, the company has divested its mobility infrastructure and enterprise businesses.  The resulting pure play is a dominant company with major market share in public safety and first responder solutions, products and services.  Avigilon adds another important piece to this pie.

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