Imperial Capital Security Group Looks at the Industry’s Future
Imperial’s quarterly macroeconomic overview of the Security Industry has a specific emphasis on the middle market (i.e., companies with enterprise values from $50 million to $1 billion). From that perspective, firm principals discuss the dynamics affecting the major Security Industry Sectors and some of the key developments and industry transaction trends.
Across the Security Industry, the firm covers three main sectors with selected subsector breakouts in this publication:
- Physical Security
- Identity Solutions
- Information Security
For nearly a decade, security services and equipment stocks outperformed the market every year, the last 12 months being the exception. The firm believes the long-term outperformance partly reflects investors belief that the war for homeland security and against terrorism will be long and sustained and partly reflects the continued growth of commercial technology and services. Its index of security industry stocks appreciated 158% from August 2001 to August 2007, compared with a 120% rise in the S&P 500 during the same period. However, since August 2007, the security index has given up all those gains and is now only marginally up over the S&P 500. The recent rebound by security stocks has dramatically exceeded the S&P 500. Acquisition activity among security technology remains strong; the integrator & alarm security area has perked up as well with spin-off activity by Securitas, Tyco and Brinks. ID M&A activity is also strong.
The full 3rd Quarter Security Industry Monitor is available at: