Video surveillance provider Samsung Techwin has a new majority owner, Hanwha Group, a $34 billion conglomerate based in South Korea.
The deal, announced Dec. 5 is "a stock transaction, not an acquisition," Samsung's senior marketing group manager Tom Cook said during a Dec. 8 conference call.
Samsung Electronics announced Dec. 5 that it had entered into an agreement to sell its shares, which amount to a 32 percent stake in Samsung Techwin to Hanwha, which has expressed an interest in increasing its position in the security and defense industry. Samsung's second-largest shareholder is South Korea's government pension plan, according to Cook, the rest of the shareholder hold much smaller stakes.
How will the deal affect the Samsung Techwin's North American operation, which is based in Ridgefield, N.J.? There won't be any immediate changes, Cook said.
Contrary to some earlier published reports, Samsung Techwin will retain the rights to the Samsung name. For how long? Cook said that was "still a negotiating point" but he said it would retain the rights for "many years" and noted that there is precedent for Samsung allowing its brand to be used for extended periods of time. Renault has used the Samsung brand for more than 20 years, he said.
Soon Hong Ann, Samsung Techwin CEO and all management will stay in place, Cook said. All R&D, manufacturing, sales and marketing operations will remain unchanged, he said. Hanwha does not have manufacturing facilities and it does not own any other businesses that manufacture or do R&D of security devices. It does have a systems integration business "which can benefit by selling SamsungTechwin products in the Asian market, but in North America, I do not see any of that occuring," Cook said.
Independent of this deal, Samsung Techwin America is looking into establishing an additional "assembly and manufacturing facility in the U.S. that would allow us to fall under the branding of 'Made in America'," Cook said. Cook said that Samsung Techwin is interested in doing this to increase its business with the U.S. government, which gives preference to domestically produced products.
Cook said Samsung Techwin's North American operation has grown rapidly in recent years. "In 2013 we were up 40 percent over the previous year, and 2014 we will end up 70 percent over 2013."
The company has had several big wins including General Mills and Qualcomm [where Samsung is working with Milestone Systems] and General Motors [where it is working with Genetec].
Asked about additional funds for R&D and other investments, Cook said "Hanwha acquired this stock because they're interested in growing in the security and defense market" and added that Samsung Techwin Americas "has never been held up because of resources in the past."
Cook said that Samsung Techwin will be introducing 5 megapixel and 4K cameras, "an all-in-one IP kit that we believe the market is ready for."
Cook said Samsung Techwin will have a 100-foot by 60-foot booth at ISC West and it will be situated next to the market leader. [Axis Communications] "We are neighbors aond purpose and we're going to take them head-on," Cook said. It will also hold a dealer meeting and an A&E meeting at ISC West.
Samsung Techwin is currently the fourth largest video surveillance provider in North America. Cook believes "by the end of 2015 we will be in the position of second."
"To be number one, that is our goal," Cook said.