GE gets into the bomb-detection business
General Electric is the most profitable and most successful acquirer of a range of businesses. It just announced it would acquire California-based InVision Technologies, the leading provider of bomb detection systems used for check-baggage security. The company uses CAT scan technology, and its business has increased rapidly since the 9/11 events. The $900 million deal comes, by coincidence, on the heels of the Madrid transit bombing, and the investment looks like a big profit-maker for GE.
Among recent GE security acquisitions:
- 2002, Interlogix, electronic security systems
- 2002, Ion Track, technologies which detect drugs and explosives using gas chromatography
- 2003, Saferex, technology for intrusion and access control
- 2003, Kampro, technologies for high-performance image sensing
- 2003, Monitoring Automation Systems, technology centralized security monitoring
It's another case of an innovative small company being snapped up by a bigger one. Little InVision is at the end of its run, where it simply can't maintain further growth thanks to lack of infrastructure. It was sell or get beaten by stronger competitors, according to San Francisco Chronicle writer Benjamin Pimentel ("Big business in security", 3/16/2004).
But analyst Brian Ruttenbur of Morgan Keegan said InVision simply could not sustain that momentum because of its size.
"I think that they did a terrific job producing a lot of machines in a short period of time," he said. "They were in the right place at the right time." But "long term, we see that you have to have scale."
As a result, he predicted that many of the smaller tech firms in the homeland security market will likely be bought out by bigger players."
8:05:41 PM 
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