Godzilla Vs. Kong: Battle of the AV Monoliths

It’s Merger and Acquisition season again, and if you didn’t see it, Diversified just brought HB Communications into its fold and staked its claim as the world’s largest AV integration firm. In 2019, AVI-SPL and Whitlock became one as well, making it the previous heavyweight champ. These two titans have been battling it out for some time. Given their similar size, you may assume their growth patterns over the last 10 years have been similar, but they’ve actually been quite a bit different. They are two different beasts, just like Godzilla and Kong.

I went back to the 2010 SCN 50 list to get all the numbers from 2010 to 2019 (before the world hit the pause button) and to analyze the growth patterns. In 2010, AVI-SPL stood squarely at the top of the pack with $506 million in revenue. Whitlock stood at $148 million and Diversified was at $105 million, and although still near the top of the list, paled in comparison.

From 2010 to 2015, AVI-SPL grew about 14% to $577 million, but Diversified was growing at a much quicker rate. Its revenues more than doubled to $215 million. At the same time, another integrator in the Southeast, Technical Innovations, was growing at an even faster clip than Diversified. They added 122% to their business in that time, taking it from $81 million to $180 million.

In 2016, Diversified acquired Technical Innovations and quickly closed a huge gap between themselves and AVI-SPL for the top spot. By 2016, the new Diversified was doing $450 million in business to AVI-SPL’s $611 million. In that same year, both companies made some moves. AVI-SPL acquired Anderson AV and their $65 million in revenue. Diversified picked up Compview and the company’s $80 million annually.

By 2017, Diversified had narrowed the gap to $70 million, doing $650 million in business to AVI-SPL’s $720 million. By 2019 (before the Whitlock acquisition by AVI-SPL), Diversified’s total reported revenues of $975 million actually surpassed AVI-SPL’s total of $905 million. However, since $100 million of those revenues were not from Commercial AV installations, Diversified technically stayed in the number two spot that year.

2020 and 2021 numbers aren’t available yet. We know AVI-SPL absorbed Whitlock, whose 2019 revenues were $360 million. We also know Diversified just acquired HB Communications, whose 2019 revenues were $113 million. The math on that says AVI-SPL would have a slight edge based on 2019 combined revenues, but perhaps 2020 and 2021 created the opportunity for Diversified to move ahead.

AVI-SPL was a mature company with consistent growth that added a regional player and acquired a major competitor. Diversified was a respectively small but rapidly growing firm that made acquisitions of other fast movers to create a company 10x its original size in less than 10 years. It will be interesting to see how these two companies grow moving forward. Can they maintain the momentum their acquisitions brought in? Will their growth curves start to fall off over time? In any case, both companies give us slightly different blueprints as to how to grow a business through a combination of organic growth and M&A.