SnapAV Acquires Volutone, Adding 7 Distributor Locations
Interview: Months after acquiring home-tech distributor Allnet, SnapAV adds Volutone for a total of 11 branch locations, with potentially more acquisitions to come.
SnapAV has acquired Volutone, arguably the largest independent distributor serving home-technology integrators with home-automation, audio, video, security, lighting-controls, networking, surveillance cameras and other low-voltage gear (read press release). Volutone adds seven branch locations – six in Southern California and one in Las Vegas – to SnapAV’s four locations in the Midwest. SnapAV picked up the Midwest branches with its acquisition of Allnet earlier this year.
SnapAV entered the home-tech marketplace more than a decade ago with the strongest e-commerce platform the channel had ever seen. The platform grew to include e-learning and other digital services, as well as a smart-home back-end, OvrC, for remotely monitoring and managing connected devices.
SnapAV started out selling commodities like cables, connectors, furniture and video projection screens, but when the company started offering more advanced systems like OvrC, it became more important to have local resources guiding home technologists into new digital territories – not just OvrC but technologies such as video analytics incorporated into SnapAV’s Visualint brand of surveillance systems.
on local distribution services
The company has focused heavily on dealer services through e-training, e-commerce, and remote support, says CEO John Heyman in an interview with CE Pro, “but SnapAV has not been able to act locally like Volutone and Allnet.”
When Heyman and his cohorts went into the field with Allnet salespeople, they observed strong relationships between Allnet reps and their dealers, both large and small.
“We observed the same thing with Volutone,” Heyman says. “We realized how important well-trained, culturally similar people like SnapAV who bleed dealer success were. … They’re not just taking orders.”
Volutone and Allnet go above and beyond, Heyman says, by delivering product to jobsites, and taking training on the road. “This is the piece that closes the loop for SnapAV,” he says.
While SnapAV has warehouses in Dallas and Fresno, Calif., they’re strictly for more efficient shipping to dealers in the region. They don’t serve as relationship hubs.
On the other hand, Volutone and Allnet do a large amount of will-call business (70% in Volutone’s case), using the opportunity to mingle with dealers, introduce them to new products, and sell more stuff.
“We’re friends with our customers,” says Volutone principal Trevor Hansen, the great grandson of one of the company founders who opened the distributor in 1902. “We’re really touching the dealers every day.”
What About Third-Party Vendors?
SnapAV provides a number of high-performance products in several categories – networking, AV over IP, surveillance, loudspeakers, home theater, racks and more – that compete with existing Volutone and Allnet lines.
How are the competitive brands responding to the new SnapAV ownership?
“Business is accelerating with third-party brands, as well as SnapAV brands,” says Allnet principal Wally Whinna. “We’re seeing dealers more often, so there’s more exposure to all brands.”
The more often dealers visit the branch, the more they buy on impulse, and the more they learn about new opportunities.
Whinna says Allnet continues “aggressive training on all brands” including staples like Luxul and Just add Power, which compete with SnapAV's Araknis networking and Binary media-distribution brands, respectively.
SnapAV’s powerful marketing and business-development resources boost exposure to all brands, Whinna says, and provide “tools to take Allnet to the next level.”
He says response from vendors has been mostly positive, although some have decided to part ways with Allnet, representing about 2% of Allnet’s business, according to Whinna.
“We gave our word we’d continue with the same strategy,” Whinna tells CE Pro. “Being a distributor is about offering choices. We haven't really changed that formula.”
Adam Levy, a SnapAV co-founder and current EVP, says internal research shows dealers are involved in “virtually every category” SnapAV carries, but “but they don’t standardize on brands. Dealers need selection. It would be fiscally irresponsible to try to serve every dealer in the industry with our products.”
He says vendors seem to be finding that “having SnapAV at Allnet brings lots of dealers in that otherwise would not be there.”
Having said that, the local presence has been a boon for OvrC. Whinna says Allnet spends “a lot of time talking about OvrC.” There’s a dedicated display in the branches, showing how the platform can be integrated with third-party brands.
As for those third-party brands, SnapAV has no plans to standardize line cards across all distributors. SnapAV itself already sells and supports third-party brands through its portal, generating some 5 to 10 percent of company revenues from those brands.
“Our strategy is to become omnichannel – buy anything anywhere, return anything anywhere,” Heyman explains, noting that this scenario won’t happen anytime soon. “It’s a big technological investment.”
The good news is that SnapAV has money to spend, with the “strongest financial partner in the industry,” Heyman says of Hellman & Friedman, the private equity firm that acquired SnapAV in 2017.
With $15 billion in capital, H&F is investing in this industry like no one else, according to Heyman: “This is unique to SnapAV. It’s important for our industry to have that kind of partner.”
The Changing Landscape of Home-Tech Distribution
It’s been a crazy year for low-voltage distribution. Volutone is big loss for the Powerhouse Alliance, a regional distribution network it co-founded in 2009. With the SnapAV acquisition, Hansen is resigning his post as president of the group.
Hansen credits Powerhouse and executive director Dennis Holzer for “helping Volutone get to this stage.”
Wave Electronics, the original Texas anchor for Powerhouse, left the group in 2012 when it decided to expand beyond its original territory. (Powerhouse picked up Electronic Custom Distributors for the territory).
This year, Wave Electronics was acquired by Kingswood Capital, and merged into AVAD, which itself was acquired by Kingswood in 2016. The combined WAVE and AVAD have 32 branches in the U.S. and Canada, although it is likely some of these branches will be consolidated.
ADI, the big daddy in low-voltage distribution, was spun off this year from its former parent Honeywell International. ADI and the residential security and home-automation arm of Honeywell now comprise the new public company Resideo (NYSE: REZI), with about $4.5 billion in revenue.
Also this year, the giant A/V distributor Stampede was acquired by Ireland-based DCC Technology, a £14.3 billion (revenue) distributor listed on the London Stock Exchange.
Will SnapAV acquire more distributors and add more local branches nationwide? Most certainly. Both Volutone and Allnet already had plans to expand when they were acquired by SnapAV.
SnapAV won’t exactly say they plan to gobble up branches to create a national distribution powerhouse, but we can infer they’ll spread beyond the Midwest and SoCal regions.
“If I’m a dealer in a major area, should I expect SnapAV to want to serve locally?” Adam Levy posits. “The answer is yes.”
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at firstname.lastname@example.org
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