Infinova raises $300 m in IPO

A second IPO part of long-term strategy
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Friday, January 7, 2011

MONMOUTH JUNCTION, N.J.—Video surveillance manufacturer Infinova announced Jan. 6 that it had taken the company public and raised $300 million with a Dec. 24 IPO on the Chinese Stock Exchange.

Why take the U.S.-based company public in China rather than in the U.S.? “That’s where the money is,” Jeffrey Liu, Infinova CEO told Security Systems News. “You get more money for your shares if you go to China, and once you have the money, you can use it anywhere you want globally.”

Infinova, which has global revenues of $57 million in 2009, had a market value of $1.2 billion on Jan. 6, according to Liu.

Funds will be used to expand R&D, marketing and sales. “We’re hiring on all fronts; we’re in hiring mode,” Liu said. “But we’re not going to use the $300 million just for that, we’ll be looking for acquisitions that will help us get more market share quickly.”

What kind of acquisitions?

“We’ve just started looking,” Liu said. However, he said, another small manufacturer would be likely.

Infinova calls itself the “integrator’s manufacturer” and Liu says while the company may be small, it has 290 R&D engineers and offers a broad product line. “We have DVRs, NVRs, transmission equipment, fiber optics, cameras of all kinds … analog to IP, and all of our product lines are designed by our own engineers. We don’t OEM,” Liu said.

Often integrators need a modification of a product feature for a certain project, and Infinova can make these kinds of adjustments. It can adjust the code in the firmware, for example.

Mark Wilson, Infinova VP of global marketing said the company is “there to hand hold and support the integrator through all stages of the project. Our goal is to help them shine in front of their customers.”

Wilson cited the example of changing the firmware of cameras to get accurate color reading for a customer who was doing a traffic monitoring installation in India. He also provided a second example via email. A school system, the fourth largest in Florida (375,000 students, 415 schools), discovered that an electrical contractor installed thousands of wall boxes at the schools that were too small for the surveillance system’s fiber optic transmitters. “It would have cost several hundred thousand dollars to replace them. And the transmitters (TX) and receiver (RX) modules only came in one standard size,” according to Wilson.

Infinova reduced the size of the TX modules so the RX module could remain the same and both would fit in the “too small” wall box. “That customization by Infinova saved the project, the budget, and nights of sleeplessness for many people,” Wilson said.

With an IPO on a small foreign exchange completed, will Infinova eventually look to expand institutional support among investors around the world (U.S. and Europe, specifically) with a second IPO on a bigger exchange, such as NYSE or NASDAQ?

Liu said the answer is “yes.”

“A secondary offering is in our long-term plan, now that we are in the capital market,” he said. “We do not know where yet but we are definitely open to other possible sites. At present, though, we will focus on using the raised funds to grow the company.”

He continued: “As a company we focus on service to our integrator. The great news is that now we have funds behind us to do a better job, to expand our scope geographically, as well as expand [our offerings to integrators]. We will offer more products, better products and better service.”