ICS specific security sales are still a very small market, but today probably the biggest player in that niche, Byres Security, was purchased by Belden. Byres’ Tofino firewall and related security technology will most likely reside in the German based Hirschmann arm of Belden.
I spoke briefly this morning with Eric and Joann Byres about being acquired. They said they had been looking for additional resources to pursue a growing market for Tofino, and not just in ICS. They considered venture and other acquiring firms, but Belden was, they thought, the best fit. Byres Security has been working closely with Hirschmann for two years now in an OEM relationship, so both sides have a good idea what they are getting into.
There is no public information on the terms of the acquisition and the Byres declined to provide any details in the call — it is common not to in this type of private acquisition. Details would give a much better feel for the investor forecast of the ICS security product market. The deal could have been anywhere from a basic no cost/no money acquisition to relieve debt and maintain employees to a lucrative cash out by the company founders and investors. We probably will never know. All we know is there is some multi-year commitment for the Byres leadership team to work with Belden.
Byres Security addresses most of the key issues, such as their working with other OEM’s, on their site. Of course with Belden in total control of the decision making, things can change at any time. In fact, that is the biggest risk here. The Tofino product and technology will represent such a microscopic percentage of Hircshmann sales it will take some vision to allow Tofino to continue or even expand.