Commercial Integrator February 2021 - 28

BUSINESS Mergers & Acquisitions
How to
SURVIVE AND
THRIVE in a Period
of INDUSTRY
CONSOLIDATION
What integration fi rms should do to prepare for what
could be another active year of mergers and acquisitions.
By Ari Fuchs
THE PRO AV INDUSTRY has seen a considerable
uptick in merger and acquisition
activity in recent years.
A paradigm shiſt is occurring in how
users deploy and consume unifi ed
communications and workplace collaboration
solutions. This is supported by the
ongoing convergence of voice, video, and
traditional IT.
The shiſt ing industry landscape is
creating opportunities for all participants
in the marketplace, including manufacturers,
distributors, and systems integrators.
Among those opportunities is the increase
of merger and acquisition activity.
The pandemic somewhat slowed M&A
activity in 2020, but the fragmented
nature of the pro AV ecosystem combined
with long-term industry growth forecasts
strongly indicates that the active M&A
trends will persist, and likely increase in
2021 and beyond.
M&A continues to be a tool used by existing
businesses to enable access into new
vertical and geographical end-markets and
28
new technologies while also leveraging
economies of scale and driving meaningful
cost effi ciencies.
The large pro AV transactions tend to
dominate the news, while, small and medium
size businesses represent a signifi cant
amount of the action.
The small and medium pro AV businesses
will undoubtedly benefi t from the ongoing
consolidation, either by being the acquisition
target of a buyer, or by acquiring talent
and customers in the aſt ermath of someone
else's acquisition.
Conversely, it is not uncommon for industry
consolidation to lead to unintended
casualties.
Business owners that do not rise to the
challenge by enhancing their capabilities,
increasing managed services revenue, or
anticipating disruptive change will likely
fi nd themselves on the outside looking in.
In order to understand how to benefi t
from the increased levels of M&A activity,
owners need to realize the factors that are
truly driving it. What is it about the Pro AV
Commercial Integrator FEBRUARY 2021
industry that is attracting investment dollars
and propelling transaction activity?
There are 3 Foundational Principles that
have pushed mergers and acquisitions in
the pro AV sector to new heights:
1. Economic Globalization is the
speedup of movements and exchanges
of people, goods, services, capital, and
technologies across the planet.
The world continues to become a smaller
place and the need for communication and
collaboration has increased exponentially
over the last 20 years.
As more and more parts of the world
continue to develop, emerging markets will
give rise to new economic opportunities
and drive the need for enhanced communication
and collaboration.
2. Rapid Evolution of AV Technologies
is largely in response to supporting the
trend of economic globalization. Flat panel
displays came onto the scene at the turn of
the century, with touch panels becoming
more and more prevalent.
The migration from analog to digital;
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Commercial Integrator February 2021

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