Equity Research Global Industrial Infrastructure May 23, 2019 Industry Report Louie DiPalma, CFA +1 312 364 5437
[email protected] The Smart City Observer Please refer to important disclosures on pages 13 and 14. Analyst certification is on page 13. William Blair or an affiliate does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report is not intended to provide personal investment advice. The opinions and recommendations here- in do not take into account individual client circumstances, objectives, or needs and are not intended as recommen- dations of particular securities, financial instruments, or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. William Blair Overview “Smart city” technology innovations and regulatory developments are occurring at a rapid pace. In The Smart City Observer, we observe how cities are using sensors to observe (monitor) and automate processes across transportation, security, and payments. We analyze leading smart city technologies related to our coverage of AeroVironment, Cubic, FLIR, and Verra Mobility that in- clude connected car, public transit payments, vehicle payments that use surveillance technologies (for deliveries and safety), facial recognition surveillance, and urban surveillance (safe city). The key(tolling/red-light themes that we cameras/speed highlight are ascameras), follows. congestion and traffic management, drones/robotics • Recent M&A activity in surveillance, transportation tech, and payments has been robust, with vendors positioning themselves to take advantage of a surge in urban RFPs and innovation.