Who will benefit from Allied Vision, NET, LMI, and Lakesight (Chromasens, Mikrotron, Tattile) being in one group?
By Dr.-Ing. Ronald Müller, CEO, Vision Markets UG (h.b.)
Even some insiders of the machine vision industry are not aware that the TKH Group is one of the biggest players in the market. After the acquisition of Allied Vision, NET, and LMI Technologies, TKH Group has announced the acquisition of the Lakesight Technologies Group from the Italian private equity firm Ambienta. Lakesight Technologies is again an umbrella for the companies Chromasens, Mikrotron, and Tattile. This move will be opening interesting opportunities for the group members as well as for OEM customers.
The TKH Group is listed at Euronext Amsterdam (TKH) with a turnover of 813 m€ in the first half of 2018 and an EBITA of 93 m€. It is an internal group of companies from the areas Telecom, Building, and Industry based on four core technologies, i.e. vision & security, mission critical communication, connectivity, and smart manufacturing. Correspondingly, machine vision was a key element of TKH’s investment strategy and it is even more now after the acquisition of Lakesight Technologies.
Before we dive into a quick outlook about the potential and challenges of this acquisition, let’s have a glance on the member companies.
Characteristics of machine vision companies in the TKH group ordered by acquisition date:
- Allied Vision (Ahrensburg, Germany, https://www.alliedvision.com): One of the oldest and globally well-established OEMs of machine vision cameras with a focus on embedded application relying on their ASIC-based camera design as well as high-resolution and SWIR cameras.
- New Electronic Technology (NET) (Finning, Germany, https://net-gmbh.com): OEM of endoscope cameras as well as distributor of NET-branded machine vision cameras from a Korean OEM and other machine vision components.
- LMI Technologies (Burnaby, BC Canada, https://lmi3d.com): One of the leading OEMs of 3D scanners based on laser triangulation for in-line inspection with a strong footprint in Automotive.
- Lakesight Technologies (Unterschleißheim, Germany, https://www.lakesighttechnologies.com/): Umbrella brand offering unified solutions based on the technical capabilities of its member companies Tattile, Mikrotron, and Chromasens.
- Tattile (Mairano, Italy, https://www.tattile.com/): OEM of area scan, line scan, and smart cameras for machine vision applications as well as all-in-one cameras for road traffic applications with embedded automatic number plate recognition (ANPR, ALPR). Beyond, Tattile offers passenger information systems for railway operators.
- Mikrotron (Unterschleißheim, Germany, https://mikrotron.de/): Specialized OEM for high-speed cameras and recording systems including PCs offering services and solutions to customers in industrial automation, product development, life science, and entertainment worldwide.
- Chromasens (Constance, Germany, https://www.chromasens.de/en): Specialized OEM of line scan cameras, color lines scan and multi-spectral line scan as well as 3D line scan solutions plus high-power line lights with a strong footprint in electronics manufacturing in Europe and Asia.
TKH’s integration strategy
The integration of companies into larger groups is one of the greatest challenges of business administration. On paper plenty of synergies seem to be obvious, from purchasing to sales, from technical development to human resources. However, a company is more than its cost and profit centers. Successful companies are driven by missions and visions and those missions and visions are (or should be) lived by its leaders. Employees have signed up with a company because they share the mission and the vision and because they trust the leaders. Erasing or replacing one of these aspects puts the loyalty and motivation of the company staff on danger – terminations by key employees and fluctuation is the result.
At least with its acquired companies Allied Vision, NET, and LMI, TKH was respecting the identity of each company, where reportedly Allied Vision’s CEO Frank Grube who sadly past away recently was not exactly in favor of a deep integration with other TKH Group members. It is to be seen in what way TKH will stick to this approach with Lakesight on board.
- The machine vision portfolio within TKH is offering a broad range now:
- Embedded machine vision cameras (Allied Vision)
- Standard machine vision cameras (Allied Vision, Tattile)
- High-speed cameras and video recording PCs (Mikrotron)
- Standard line scan, color line scan, multi-spectral line scan cameras (Chromasens)
- 3D lines scan systems (Chromasens)
- 3D scanners based on laser profilometry (LMI Technologies)
- Road traffic cameras with integrated license plate recognition (ALPR, ANPR) (Tattile)
- Short wave infrared (SWIR) cameras (Allied Vision)
- High-power line lights (Chromasens)
- The variety of product categories within some of the single companies is a challenge already let alone the entire variety in the group. Yet, some synergies can still be leveraged.
The average integrator, device or machinery OEM might not see an immediate benefit from the new group strength. Such type of customers usually have a need for special components or off-the-shelf solutions and would care little about that else is available from sister companies of their supplier.
Global industrial players, however, such as OEMs in Automotive, Consumer Electronics, Aerospace or Railway, have a need for various technologies to solve their challenges in product development and production. As Alexander van der Lof, CEO of TKH, states in the press release, TKH and its group members would now be able to offer a comprehensive range of technologies and product offerings which would allow them to build solutions where smaller players would not be considered as sufficiently powerful on the financial and technology side.
From origin, most TKH machine vision companies are headquartered in Germany. Accordingly, the DACH region and Europe are well covered by most players. In terms of international presence, Allied Vision certainly has the leading network of sales offices, resources, and distributors around the globe, where others operated with one or the other employee covering North America and Asia. As Peter Tix, CEO of Lakesight, states in the press release, it could be interesting to leverage the existing sales organizations within the TKH group around the globe to cater customers even better.
All machine vison group members are building cameras – fair enough. Yes, there is an FPGA in almost every of TKH’s devices and yes, FPGA development resources are one of the most precious assets to have these days. Yet, the needs of the various product categories are highly different to expect sufficient synergies in unifying the different firmwares unless it comes to totally new product developments, where united forces can contribute competences and manpower.
On the sensor side, the closet match is in the machine vision cameras of Allied Vision and Tattile, and to some extent in the laser scanners of LMI. Line scan (Chromasens) and high-speed sensors need different IP and architectures. Same holds for the camera interface side. Within the TKH group there is a host of interfaces, from GigE, to USB, Camera Link, CoaXPress, etc.. A unification of interface hardware, drivers and SDKs is also a major effort which appears reasonable to take for new product lines if ever.
The machine vision market is facing ubiquitous commoditization, especially when it comes to cameras. It is one of our credos in our product management consulting assignments that a higher level of integration, i.e. getting closer to specialized solutions for high potential market niches, is one of the most promising ways to success. A consortium of such broad span of competencies as within the TKH group allows for such developments towards unique offerings beyond “me-too”-solutions.
As long as it comes to purchase volumes, synergies might be easy to leverage. Sensor OEMs, just as one example, are willing to re-negotiate prices if volumes go up and the logistics are simplified at the same time, i.e. larger lot sizes at the same time. The coordination of demands for supply in quantity and timing is one of the options where costs can be reduced.
Overall, the brands given above are rather well-established in the global machine vision market. It would be extremely hard to unify the listed range of product offerings under one brand. Almost every offering has different target customers with different needs. Building a brand and a brand promise that addresses all sufficiently well is feasible but a Herculean task. In light of that, it is expected that all brands remain unchanged where Lakesight Technologies might be even more positioned as OEM solution provider which brings together the capabilities of the other group members to address global customer enterprises.
The acquisition of Lakesight Technologies is a major next step towards the consolidation of the machine vision market. Great growth rates of the overall market persist and are expected for the upcoming years. Machine Vision has evolved from a nice-to-have feature to a core technology that enables state-of-the-art manufacturing. Thus, it is paramount for big customers to collaborate with financially stable and technologically capable providers of machine vision solutions. Small companies do not fulfill their requirements, yet they can facilitate growth by focusing on other target customer groups.
The TKH group and its member companies shall be looking to a bright future if they manage the integration with the goal to leverage the best of both worlds: Small entities with a clear brand positioning and flexibility to act upon customer needs, market trends, and technological advancements and on the other hand a powerful consortium which is able to address the needs of global players and is cable to come up with highly advanced solutions to kicking machine vision to an unprecedented level.
Note: Vision Markets UG is an independent marketing and management consulting firm. It is not affiliated with the TKH Group. This article is published as journalistic comment on market trends.