In what would be a monumental industry deal, Canon is making a strong push to purchase Axis Communications, the marketshare leader in network IP video surveillance cameras and related devices, for $2.8 billion.
This comes less than a year after Japanese imaging giant Canon bought Milestone, a leader in video management software, for an undisclosed amount.
Axis Communications held a 27 percent marketshare in video surveillance in 2014.
Axis said its board of directors unanimously supported the offer and that three of its top shareholders representing around 40% total shares will accept it. Canon already sells surveillance cameras and sees the sector as a growing market, although it has not disclosed how much it earns from such products.
The deal will make Canon a top player in the video surveillance market, which was worth an estimated $15 billion at the end of last year, according to researcher IHS. Within that market, there is a $3.86 billion segment for network-connected security cameras, which is led by Axis with a 17.5% share as of 2013.
The deal comes after Canon late last month reported a slight increase in fourth quarter profit, as a weaker yen and rising sales of office equipment offset weakness in a camera division competing with smartphones capable of high-quality imaging. The company, which earned over 80%t of its revenue overseas in 2014, said it would pay in cash.
Axis is targeting average annual growth of at least 20% and a profit margin of at least 10%. Around half of its sales come from the Americas, 40% from Europe, the Middle East and Africa, and the rest from Asia.
Axis said it will remain as a separate legal entity within Canon and that its current management team will stay.
