Recognizing the need to add high-performance audio to its product suite, Control4 Corporation (NASDAQ: CTRL) has announced the acquisition of venerable audio brand Triad Speakers, Inc. for $9.6 million in cash.
“Entertainment is integral to the connected home and our Control4 dealers are designing end-to-end experiences for family room entertainment, home theaters, and indoor and outdoor multi-room music for their customers,” says Martin Plaehn, Control4 Chairman and CEO. “The acquisition of Triad brings proven premium-acoustics experience and innovation to our company, enabling us to immediately deepen our entertainment offering and develop new integrated-audio experiences for the future.”
Portland, Ore.-based Triad has a 30-year heritage of delivering high-performance audio solution. The company earned approximately $9 million in revenue in 2016.
Control4 plans to invest in the operations of the business during 2017 in order to push adoption of these products through its larger sales channels. As a result, Control4 anticipates that the acquisition will be net income neutral in 2017, after adjusting for acquisition related expenses.
Plaehn says Triad's attention to audio design and detail, its focus on the quality of the listening experience, and its ability to make customized products made it an ideal cultural fit for Control4. Triad manufactures a range of high-quality, built-to-order audio speakers for home theaters, family rooms, whole-home or multi-room audio, as well as for outdoor environments.
The Triad brand name will continue and nearly the entire Triad team will be joining Control4, including Triad's founder and CEO Larry Pexton, as well as its R&D, manufacturing, and custom-services employees, all of whom will continue operating from Triad’s existing facility in Portland, Oregon.
Plaehn sees the acquisition of Triad fitting in strategically with the Control4's controllers, in particular its new fully programmable Control4 EA-series controllers with native high-resolution streaming music services, its family of multi-room audio matrix switches and amplifiers, and its family of ultra-HD 4K video matrix switches with audio down-mixing capabilities.
“Audio is wickedly important to the connected home, whether that be in home theater or in whole-home audio,” says Plaehn. “I am passionate about bringing a great experiences to consumers. Durable, high-performance products matter… and the others don't.”
Over the past few years, Control4 has made several key acquisitions in different disciplines, including home automation driver/app maker Extra Vegetables in September 2014, A/V switching company Leaf in February 2015 for $9 million, and networking specialist Pakedge in February 2016 for $32.7 million.
550 Current Triad Integrators
Triad currently has 550 dealers who purchase the products directly via independent reps. Control4 has already activated a new dealer portal specifically for Triad dealers that will enable them to place their product orders and customization requests.
Control4 and Pakedge dealers may also order Triad solutions online, effective immediately.
In the coming weeks, the Triad dealer portal will also include technical training information and additional marketing resources.
“The Triad dealers will not change, but the method by which they are managed and motivated will change,” notes Plaehn, adding, “Triad has been under-distributed. We can easily double or triple that dealer base.”
Pexton is thrilled. He said the deal was initiated during a conversation at Integrated Systems Europe (ISE) 2016 when Triad received a one-off speaker request that Pexton knew was beyond his company's engineering capabilities.
“At Triad, high-quality audio, custom design, and seamless integration have been the standards that we will continue delivering to our dealers and their end customers. Becoming part of the Control4 family enables us to expose our engineering expertise to those homeowners in the broader market of home automation and entertainment who are passionate about their listening experience,” says Pexton.
NEXT: Control4 (CTRL) Surges 36% on Record Revenues: What the Heck Is Going On?
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