Gone are the days when a smart-thermostat maker might be acquired for billions of dollars, but there’s still plenty of merger and acquisition activity in the smart-home arena, as well as major reorganizations, shakeups, dissolutions, investments and IPOs.
Here we highlight some of the IoT, A/V and smart-home activity for 2015, including several deals (and non-deals) in the custom electronics market.
Home Automation, Security, IoT
Legrand NA acquires Q-Motion (Dec., 2015)
Q-Motion, a leading supplier of high-end motorized window coverings, was acquired by Legrand North America, parent company of NuVo, On-Q, Pass & Seymour, Vantage, Watt Stopper, Middle Atlantic and other leading brands in the home automation, lighting controls and building infrastructure categories.
Of all the deals in 2015, this one seems to make the most sense. Both Legrand and Q-Motion are active in the home-technology integration channel, and Legrand makes it a habit to let acquired companies operate independently. Q-Motion has done quite well on its own, rising to a CE Pro 100 top brand in just a few years of business.
Terms were not disclosed.
Spring Window Fashions Acquires MechoSystems (March 2015)
MechoSystems, the parent company of motorized shade manufacturer MechoShades, was sold to Spring Window Fashions, which owns leading brands of window coverings including Bali and Graber. Founded in 1969, MechoSystems bills itself as “the world's leading designer and manufacturer of innovative window-covering systems for the architectural and design communities.”
Terms were not disclosed.
Alarm.com IPO (June, 2015)
Alarm.com (Nasdaq: ALRM) became only the second pure-play home automation IPO when it went public on June 26, 2015, two years after Control4’s (Nasdaq: CTRL) IPO. Alarm.com is a leading SHaaS (smart home as a service) provider for the security and home-automation installation channel. The service is compatible with security/automation systems from four manufacturers: Interlogix, DSC, 2Gig (Nortek) and Qolsys.
Offering 7 million shares at $14, Alarm.com opened at $16.05, or almost 15% above the initial offering price. The has traded as low as $10.26 and as high as $20.25. It now trades around $17.
Universal Electronics (UEI) Acquires Ecolink (Aug. 2015)
UEI, a giant OEM provider of universal remotes and related devices for TVs, settop boxes and other A/V components, acquired Ecolink, a small provider of Z-Wave devices and pro-oriented security sensors. UEI plans to package a complete smart-home solution for service providers, notably the regional telecom and cable companies it already serves. UEI intends to operate the acquired business as a wholly-owned subsidiary and market the home security and automation products and services under Ecolink brands.
Rumor has it that UEI also is financially involved with Encore, the sister company founded by Ecolink founder Mike Lamb and 2Gig founder Lance Dean.
Monitronics Acquires LiveWatch (Dec. 2014)
LiveWatch Security LLC, a large provider of security and home automation installations, was sold to Monitronics for $67 million – or 74x recurring monthly revenue (RMR). Monitronics, a giant central monitoring station and subsidiary of Ascent Capital Group (Nasdaq: ASCMA), currently serves approximately 32,000 accounts.
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Sigma Designs Acquires Bretelon (Nov. 2015)
Sigma Designs, Inc. (NASDAQ: SIGM), SoC developer for smart TV platforms and owner of Z-Wave technology, acquired Bretelon Inc., a mobile IoT developer for approximately $22 million in cash. Upon the completion of the transaction, the former Bretelon operation will be referred to as Sigma’s Mobile IoT Product Line.
Bretelon, comprised of a bunch of R&D engineers and once led by iControl founder Reza Raji, has been stealthy in its two years of existence, but we assume “mobile IoT” refers to connected devices that communicate over cellular networks.
British Gas Acquires Alertme (Feb. 2015)
UK-based Alertme,which powered the first version of Lowe's Iris home automation system, was acquired by British Gas for $100 million.
Honeywell Acquires Elster (July 2015)
Security and industrial controls leader Honeywell acquired Elster, a global leader in gas heating, controls, metering and advanced technology. Elster’s water and electricity metering business, along with part of its gas business, will become part of Honeywell’s Environmental & Energy Solutions (E&ES) business, an operation that produces residential and commercial building controls for energy efficiency, water conservation, and water and air quality. E&ES is a global business unit of Honeywell Automation and Control Solutions.
The $5.1 billion deal is Honeywell's largest ever since it was acquired by AlliedSignal in 1999 for $16.1 billion. Honeywell CEO Dave Cote has set a goal of $10 billion in takeovers by 2019.
United Technologies Does Not Acquire Nortek (Aug. 20, 2015; Oct. 8. 2015)
Nortek (Nasdaq: NTK), a diversified manufacturer of HVAC, home automation, security, A/V and productivity solutions, saw shares soar when it was rumored the company would be acquired by United Technologies Corp. (NYSE: UTX), a conglomerate that owns the security and smart-home subsidiary Interlogix.
NTK surpassed its 52-week high of $89.9, spiking at $93, but quickly returned to normal levels before NTK declared two months later that any reported acquisition talks were over. NTK now trades in the low-$40s.
Nortek Security & Control Acquires Numera (July 2015)
Nortek Security & Control, which owns the home security and automation brand 2Gig, is also a leading provider of personal emergency response systems (PERS), including the ones featured in the “Help I've Fallen” ads. In 2015, Nortek acquired the mobile PERS (mPERS) and telehealth assets from privately held Numera, Inc. The transaction is valued at $12 million, plus consideration based on future sales, according to an SEC filing. Numera recorded unaudited net sales under $3 million in 2014, its first full year of sales.
Sears Acquires WallyHome from SNUPI (Oct. 2015)
Sears Holding Corp. is getting serious about the smart home. The company built a flagship experience center in the San Francisco area, featuring smart-home vignettes and a wide array of home automation systems and connected devices in the Sears Connected Solutions portfolio. Sears went one further, acquiring WallyHome sensor technology from startup SNUPI. While WallyHome is packaged as an IoT moisture-sensing solution, SNUPI's technology goes much deeper.
As we wrote earlier: SNUPI's magic is not in the moisture detection and alerts, but the sensor technology itself. SNUPI stands for Sensor Network Utilizing Powerline Infrastructure, a technology created by engineers at the University of Washington and George Institute of Technology. The solution comprises ultra-low-power 13.5 MHz sensor nodes that transmit data by coupling over the powerline to a single receiver plugged into an AC outlet in the home. In other words, the nodes use the powerlines in the home as a giant antenna, attaching themselves wirelessly to it and communicating over the infrastructure to the hub.
Quirky, the GE-backed venture promoting inventions from regular folks, had a storied existence but a relatively quick demise. The company filed for bankruptcy under Chapter 11, but its home automation subsidiary Wink lives on. Wink, maker of a popular home automation hub, was sold to its OEM partner Flextronics (Nasdaq: FLEX) for $15 million.
Flex says, “After the acquisition, Wink will remain a separate entity and corporation, with its own management structure for day-to-day activities and operations. Flex will look to leverage Wink's platform and provide current and future Flex customers with improved connectivity in a rapidly expanding open ecosystem.”
Silicon Labs Acquires Bluegiga (Feb., 2015)
Already a leading provider of SoCs for the smart home, Silicon Labs (Nasdaq: SLAB) acquired Bluegiga, developer of Bluetooth and Wi-Fi modules, software stacks and development tools. SiLabs says the acquisition complements its own 802.15.4 ZigBee and Thread mesh networking software, ultra-low-power sub-GHz solutions, and wireless MCU and transceiver product offerings: “The combined wireless connectivity portfolio and development ecosystem will enable Silicon Labs to address a broader range of market opportunities and customer needs. Together, Silicon Labs and Bluegiga offer customers a “one-stop-shop” source of standards-based wireless connectivity solutions including high-performance, long-range and ultra-low-power options.”
SunEdison (NYSE: SUNE), the giant solar-panel installation firm, announced it would acquire competitor Vivint Solar (NYSE: VSLR) in a deal valued at about $2.2 billion. At least it was worth that much in July when the deal was announced. But since then, SunEdison's stock has tanked, diminishing the value to Vivint shareholders. SunEdison has not issued a preliminary proxy, suggesting perhaps the deal might be restructured or voted down.
According to TheStreet.com, “Some analysts predict that the residential industry will suffer when contract reassignments caused by home sales hit leasing portfolios over the next several years. Portfolios also could be hurt by technological advances that cause existing installations to become obsolete.”
Leviton Acquires Intense Lighting, LLC (May 2015)
Leviton, maker of lighting controls, electrical devices, wire and cable, energy management and home automation solutions (via the former HAI and BitWise), acquired Intense Lighting, LLC, manufacturer of energy-efficient luminaires for residential and commercial applications.
Voxx International (Nasdaq: VOXX), which owns Klipsch, Audiovox, Audio Research and other consumer- and automotive-electronics brands, acquired a 54% stake ($3 million) in technology-partner EyeLock, developer of biometric technology. EyeLock's iris-authentication technology has been used for applications such as ATM machines and building access controls. Voxx itself has used EyeLock's eye-scanning technology for authenticating the driver of a vehicle before the car will start.
Tyco Invests in Qolsys (Dec. 2014)
Global security provider Tyco International (NYSE: TYC) made a strategic investment in Qolsys, a start-up manufacturer of security and home automation products, via Tyco Security Products. The interest in Qolsys was meant to leapfrog the technology already provided by Tyco's traditional DSC home-security business.
Legrand Invests in Netatmo (November 2015)
Netatmo, which makes Internet-connected devices including a weather station, thermostat and the Welcome camera with facial recognition, landed a €30 million round of financing led by Legrand and previous investor Iris Capital. France-based Legrand owns such brands as NuVo Technologies (multiroom audio), OnQ (infrastructure and home automation) and Pass & Seymour Legrand (electrical devices).
Canary Raises $30 Million (June 2015)
As we wrote: Canary offers a perfectly nice IoT security camera with no home automation capabilities. How do they keep raising so much money?
IC Realtime and spinoff brand IC Real Tech, known for high-performance 720-degree video cameras, raised $15 million from private investment firms Breakaway Capital Partners and Plexus Capital.
Canon Acquires 84% of Axis (April 2015)
Canon acquired a large majority of Axis Communications, a leader in networked video surveillance products. Canon had attempted to buy the company outright for $2.8 billion.
SnapAV Acquires SunBrite (Oct. 2015).
Things got interesting in 2015 when SnapAV, a leading supplier to the home-technology installation channel, acquired an established manufacturer, SunBrite TV. With the acquisition, SnapAV defied its tradition of (mostly) designing and sourcing its own products from HDMI extenders to power-management systems to networking gear, leading us to wonder: Who might SnapAV acquire next?
Control4 Acquires Leaf (Feb. 2015)
Control4 (Nasdaq: CTRL) made a relatively modest acquisition in February 2015, picking up Nexus Technologies Ltd. (dba Leaf) for $9 million in cash. Control4 is a leading provider of mainstream home-control systems sold through the professional installation channel. Leaf adds high-end multiroom audio/video distribution systems to the Control4 ecosystem, boosting the manufacturer’s margins.
During Control4’s Q3 2015 earnings call, CFO Mark Novakovich said that the “acquisition of Leaf has been a solid addition, and we continue to explore and analyze other strategically aligned opportunities that if acquired would be accretive to our growth and not dilute on mid-term and long-term profitability.”
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Nortek (Nasdaq: NTK) underwent yet another reorganization, dissolving its unprofitable Pro A/V group. That group included Magenta and TV One, which were divested, and Gefen, which was folded into the existing Core Brands – the group that serves home technology integrators with home automation and A/V brands such as Elan, Niles, Niles and SpeakerCraft.
Gefen has always made both residential- and commercial-oriented multizone audio/video distribution systems, but will now focus on consumer solutions as part of Core Brands.
A new Nortek e-commerce portal for dealers now includes all of Core Brands, including Gefen, as well as select products from Nortek Security & Control (GoControl Z-Wave devices), NuTone (central vac) and Omnimount (TV mounts).
Planar Acquired by Chinese LED Maker (Aug. 2015)
Planar, the commercial-display company that acquired home theater projector manufacturer Runco in 2007 for $36.7 million, was sold to Leyard Optoelectronic Co., a Beijing-based manufacturer of LED display products. Planar had been a Nasdaq-listed company under the PLNR ticker symbol. The merger valued Planar’s equity at approximately $156.8 million on a fully diluted basis.
Vizio Files for IPO (July 2015)
Mass-market TV and audio manufacturer Vizio (VZIO proposed) filed for an IPO, intending to raise up to $172.5 million. In its Form S-1 IPO filing with the SEC, Vizio notes it has sold 65 million TVs since the company launched in 2002, of which 15 million are “smart,” or Internet-connectable. Some 61% of the smart TVs – about 8 million of them – are actually connected to the Internet, according to the filing.
One notable revelation in Vizio’s filing is the company’s Inscape data service, which captures customer data “on a massive scale with great accuracy,” according to Vizio. This data will be an important, if controversial, element of Vizio’s growth in the future.
Soundcast, which was almost acquired by former SpeakerCraft leader Jeremy Burkhardt in 2013, was sold to the private investment company Hancock Park Associates in 2015. Oscar Ciornei, principal of the long-time industry consulting firm The OAC Group, was named president and CEO of the maker of outdoor loudspeaker systems.
In a curious move, start-up speaker manufacturer Beale Street Audio acquired the BMB Electronics B.V., an established Netherlands-based distributor of such CE brands as URC, Current Audio, Zektor, Planet Waves, Leviton and Terra.
More in A/V
Onkyo Acquires Pioneer Electronics USA (March 2015)
Hisense Buys Sharp America for $23.7 Million (Aug. 2015)
Home Technology Integration Channel
VIA International Closes (Oct. 2015)
The home technology industry's most ambitious attempt at a dealer merger fell apart. After two years in operation, VIA and its six founding integration companies dissolved. Some of the original businesses are back up, including new versions of Paragon Technology Group (Colorado), DSI Entertainment (Los Angeles) and Cyber Sound (Scottsdale, Ariz.).
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