Security Industry Overview And Investment Focus
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In 2006 the security industry generated approximately $180 billion in annual revenues growing at 10% per
annum. The industry includes a broad range of products and services that protect people and assets from
harm, damage or loss. Market drivers include growing concerns about various threats, new regulations,
and enhanced technologies.
The security industry is highly fragmented, comprised of commercial, consumer, and government market segments and is in the process of long-term consolidation. Companies can range in scope from sophisticated electronics like intelligent video and biometric access control systems to mundane offerings such as closed circuit television and guard services. Established companies that have the following elements characterize the industry: recurring revenue streams from an existing customer base, broad distribution, and long product life cycles. Customers of various security offerings are generally motivated by reliability and support versus price. The industry has demonstrated the ability to grow independent of economic cycles as crime tends to increase during periods of economic hardship. These industry dynamics create a positive backdrop for which to invest in buyouts and later stage financings. |
Components of the Security Market Include:
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