Emerging from Chapter 11, Home Director Buys Destiny Networks

Just days after emerging from Chapter 11 bankruptcy protection, Home Director, Inc. has agreed in principle to acquire Destiny Networks, Inc. The company plans to pursue a strategy targeting homebuilders, using a national installation company to perform the jobs.

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Just days after emerging from Chapter 11 bankruptcy protection, Home Director, Inc. has agreed in principle to acquire Destiny Networks, Inc. The company plans to pursue a strategy targeting homebuilders, using a national installation company to perform the jobs.

Just days after emerging from Chapter 11 bankruptcy protection, Home Director, Inc. has agreed in principle to acquire Destiny Networks, Inc. Details of the transaction, including whether it is a cash deal or involves the issuance of stock, have not been released. 

The acquisition takes the relationship between the two companies a step beyond their previous deals. They have been working together since October 2004 when they began co-marketing Destiny's HDC-1, an IP-based home theater controller, along with Home Director's line of structured wiring systems.

Under the reorganized Home Director, CEO Michael Liddle remains in that role, and former Destiny president and CEO Mark Stiving becomes president of Home Director.

In an exclusive interview with CE Pro, Liddle and Stiving outlined the ambitions for the company, which includes a wide-ranging strategy with various partners, including builders, integrators, a national pre-wire company and telecoms.

“Homebuyers want more. They want easier control of their home entertainment centers and whole house music systems. They want the ability to monitor and control the environment of their homes,” says Liddle. 

“They want solutions that integrate seamlessly with the convergence of data, voice, and video. And they want to do all this with a platform that is 100 percent reliable and can scale to meet their future needs. We believe that the combination of Home Director and Destiny Networks will enable the roll-out of products that meet these needs.” 

That platform to which he is referring is Linux-based, which Stiving says “makes the controller more reliable and less expensive. Destiny's Ubiquity software application eliminates the need for a programming language.”

Meanwhile, the company plans to target master-plan community homebuilders using a national pre-wire/rough-in installation force tied closely with local CE pros. Liddle believes builders will embrace a value-add system that takes structured wiring out of the commodity product category, offering solid margin. 

Home Director previously had a strong following among builders, but the initiatives lost steam over time due to internal and external financial issues; the acquisition of the custom integrator Digital Interiors, which led to channel conflicts; and a failed national program with Sears. 

Targeting Production Builders, Telecoms

Under the new Home Director, the goal is for production builders to spec the system in their new greenfield communities, especially those with Fiber to the Home (FTTH) infrastructures. 

Home Director is seeking out telecom companies deploying FTTH networks to recommend Home Director for the in-home enclosure, and Liddle says the company will work directly with builders to sell Home Director products. The company has contracted with an undisclosed national company to install the structured wiring and the rough-in work.

The trim-out and upgrades will be handed off to local integrators. Liddle believes Home Director will be able to attract traditional integrators in part because of the work it does on the backend — attracting the home builders in the first place, and initiating the structured wiring installs through the national firm.

Finally, Home Director plans to establish a national clearinghouse that handles leads and helps arrange the partnerships. 

Beyond the system package, Destiny Networks' controls will continue to be sold separately through distribution, while Home Director will be sold separately via a dealer-direct channel. 

Pricing for the package has yet to be determined, but Stiving said it will be “very, very competitive.” The name Destiny Networks will continue as the control brand. All of Destiny Networks' employees will be hired by Home Director.

Destiny Networks entered the home systems scene in 2002 with a pricey handsfree automation system. Since then, the company has released several products focused on moderately price, IP-enabled A/V controllers that integrate with a handful of home systems such as lighting controls.

The Rejuvenation of Home Director

Home Director, Inc. returns with a vengeance after emerging from bankruptcy on Oct. 23.

The company had filed for bankruptcy protection under Chapter 11 in September 2005.

One of the pioneers of structured wiring, and a one-time marketing giant among home builders, Home Director closed its doors in April 2005. One month prior to the shutdown, the company sold off certain assets of Digital Interiors (DI), the installation company that accounted for about 70 percent of Home Director's estimated $10.5 million in revenue (2004).

Home Director has been rebuilding its business since November 2005, when it secured a $2.5 million loan and opened new offices in Campbell, Calif. The new investors now own 90 percent of Home Director stock. The other 10% of the stock, plus 14 cents per dollar owed (over time), goes to creditors with unsecured claims.

The Form 8-K associated with Home Director's emergence from bankruptcy can be found here.

Structured wiring will be bundled with Destiny controls, using national installation company.

About the Author

Julie Jacobson
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Julie Jacobson:

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson

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ControlNews

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Destiny NetworksHome Director