Kratos – another big player?

If, as expected, Kratos Defence & Security Solutions has acquired Ingersoll Rand’s integration business, it will be an interesting move for the systems integration market. However, with the top 10 systems integration service providers to the US market accounting for only around 30% of revenues, what impact will it have on the industry as a whole?

Niall Jenkins

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If, as expected, Kratos Defence & Security Solutions has acquired Ingersoll Rand’s integration business, it will be an interesting move for the systems integration market. However, with the top 10 systems integration service providers to the US market accounting for only around 30% of revenues, what impact will it have on the industry as a whole?

Looking at the acquisition, the key point seems to be the increased geographic coverage that Kratos will gain from the deal. This will help it compete against the national and international integrators such as Siemens, Diebold and ADT and is a sign of the ambition of the company.

In addition, there appears to be some synergy between the markets served by the two companies. In an interview with Security Sales and Integration, Ben Goodwin, President of Kratos' PSS division, commented that the latest acquisition had a similar vertical market footprint to Kratos. This was also the case with its previous acquisition of Henry Brothers in December 2010, and sits well with what systems integrators have been telling us for some time: that they are looking to focus on a number of specific vertical markets and provide a more bespoke service & maintenance offering.

So back to the question of what impact the acquisition will have. Well, according to IMS Research, the combined integration revenues from Kratos and Ingersoll Rand would position the company as the 8^th largest service provider to the US market. However, it remains to be seen whether this increased size and geographic footprint will allow it to compete with the established giants of the integration industry.