Canadian tech success Avigilon contemplates life after Motorola takeover
Avigilon, one of Canada’s tech success stories, was delisted from the Toronto Stock Exchange Monday, as part of the completion of a $1 billion takeover by Motorola Solutions.
Based in Vancouver, Avigilon makes security cameras, access control systems and the software that allows those devices to work smarter and provide more information to users.
Avigilon president and COO James Henderson said the sale, first announced in February, gives Avigilon a huge opportunity for growth within Motorola, where it is expected to continue operating as its own business unit.
Motorola is a long way from the company that made flip phones 15 years ago; these days, the company is heavily focused on systems for first responders.
They make the command centres for first responders that connect central dispatch with the people in the field.
Henderson said that Avigilon’s expertise with video surveillance makes it a natural fit.
“We’re bringing to the table the eyes to their ears. You know, they’re a leader in voice and becoming a leader in other things,” he said.
“We are a leader in video — video intelligence, video analytics, and high quality end-to-end video solutions.”
Avigilon is also deploying deep learning and artificial intelligence software that allows those surveillance cameras to do some incredible things.
“It actually learns what it’s looking at, and what is normal,” Henderson said. “People walking down a street is normal. Cars driving down the road are normal. Now, all of a sudden if people start running in all directions — something it’s never seen before — it can trigger an alarm.”
The systems can also detect attributes like hair colour, sex and clothing colour which allows operators look for individuals, searching through video footage coming from dozens, or even hundreds of cameras.
By launching a cloud system for operators, Avigilon can also update security systems with new features over time.
For some who follow the tech industry in Canada closely, watching another Canadian success story get gobbled up by an American company brought a tinge of disappointment.
“I’ve heard the rumblings of the disappointment, but to be quite honest, I hear that disappointment from analysts,” Henderson said, with a hint of bemusement, adding that sale provided great value for shareholders.
Carl Rodrigues, CEO and president of SOTI Inc. — a Mississauga-based enterprise mobility management company — is a vocal advocate for growing Canadian startups at home, instead of seeing them sold once they get big enough.
“I think there’s a lower bar we set for ourselves,” Rodrigues said.
“I want to build a company that rivals a Google or a Facebook or a Tesla. I don’t really understand why Canadian CEOs in general don’t set the bar that high.”
William Fitzsimmons, analyst with equity research firm Morningstar, said the purchase is a signal that Motorola Solutions is making software a bigger part of its business.
“I think when we looked at the numbers initially, the price seemed a little high, but given the growth prospects of Avigilon, I think that makes sense,” he said. “It really shows doubling down on software and these new types of technology.”
Walter Piecyk, analyst with BTIG, a New York financial services firm, said that integrating Motorola and Avigilon systems so they play well together could be interesting, and the recurring payments from clients, which come from the cloud services are attractive for investors.