Bank survey forecasts lots of M&A activity for 2016

Some of the Honeywell dealers who responded said they’ll acquire three or four companies
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Tuesday, November 24, 2015

CHEVY CHASE, Md.—Dealers will be actively acquiring over the next year, according to a recent survey from Capital One Commercial Banking.

“The survey indicated things we expected—a very positive outlook,” John Robuck, managing director of Capital One Commercial Banking, told Security Systems News.

A high percentage of dealers who responded—68 percent—said they would be buying at least one other company in the coming year; 16 percent expect to purchase three or four, he said.

Conducted at Honeywell CONNECT 2015 in October, the survey had 104 respondents. Eighty-two percent noted they needed financing for either organic growth or acquisitions, he said.

“It’s a good time to borrow money,” Robuck said, especially “if you partner with folks who understand the industry, who are flexible and understand the needs of the business.”

The Capital One survey reaffirms positive trends in the industry, he said. “The industry has done a good job of investing back into it, with customer service, etc. We’re very bullish on the industry,” Robuck said.

“We’ll be interested to see how cyberthreats are seen and perceived by the industry,” Robuck said.

When asked about trends that would impact the business, 12 percent of respondents cited an increase in cybersecurity threats over the next 12 months. Thirty-six percent cited increased competition as an impact, followed by technology innovation, 34 percent, then M&A activity and consolidation, 18 percent.

Interconnected devices were cited by 42 percent of respondents as the technology innovation or trend expected to cause the most impact in the next 12 months, followed by do-it-yourself and self-monitored systems—24 percent—and managed video monitoring—23 percent. Fewer respondents cited enhanced data analytics—7 percent.

Capital One’s Security Finance team provides senior lines of credit to security companies that want working capital, organic creation cost financing, and/or acquisition support.