Cemtrex buys 46% stake in Hauppauge video surveillance firm

Cemtrex Inc., a Farmingdale company that in September sought to acquire a West Coast company more than twice its size, said Monday it is making a "strategic investment" in about 46 percent of the outstanding equity of a Long Island maker of video surveillance hardware and software.

Shares of Hauppauge-based Vicon Industries Inc., whose video equipment is being used by police in Sinaloa, Mexico, the heartland of that country's drug cartels, rose 1.1 percent Monday to close at 38 cents. Vicon has a market capitalization of about $6.7 million. Stock in Cemtrex, with a market capitalization of about $30.3 million, fell 5.3 percent to close Monday at  $2.87.

Cemtrex acquired the stake in 51-year-old Vicon held by Anita G. Zucker, trustee for the holdings of the InterTech Group Inc., based in North Charleston, South Carolina. Zucker owned 46.1 percent of the company through stock and warrants as of March 15, according to a Securities and Exchange Commission filing. 

Robert Johnston, InterTech's chief strategy officer, confirmed in a telephone interview that Cemtrex bought "100 percent of our position" and that InterTech expected to relinquish its seat on Vicon's board of directors.

Executives at Vicon declined to comment on the transaction.

“This transaction represents a strategic investment for the company as we continue to expand our operations into long-term growth markets," Cemtrex president and chief executive Saagar Govil said in a statement. "Vicon is a strong brand in the security and surveillance market...We are looking forward to leading Vicon to long-term success.”

Last year, Cemtrex urged shareholders of Key Tronic Corp., a Spokane, Washington, provider of electronics manufacturing services, to swap their stock, trading at about $7, for Cemtrex stock, trading at about $3. That bid later was revised to a combined stock and debt offer, but neither takeover bid succeeded.

Govil and his father, Arun Govil, together control about 42 percent of stock in Cemtrex, a provider of manufacturing services for electronics makers and environmental control systems.

In the quarter ended Dec. 31, Vicon posted a net loss of $1.3 million on net sales of $7.7 million. As of Sept. 30, the company had 120 employees.