Today Legrand announced the acquisition of Luxul Wireless, adding the leading IP networking provider to its stable of brands — On-Q, Vantage, Middle Atlantic, QMotion, NuVo and others — that cater to the custom integration industry.
Only two months ago, Pakedge Device & Software, a chief competitor to Luxul in the high-performance wireless networking category, was snatched up by home automation manufacturer Control4. Pakedge ranked #1 in the home networks category last year in the CE Pro 100 Brand Analysis of most-used brands among high-revenue integrators; however, Luxul was close behind, with 30 percent of Top 100 dealers saying they used the brand — a two-fold increase over Luxul's adoption rate one year prior.
But Luxul is believed to enjoy higher revenues and broader adoption than Pakedge in the home technology integrator channel, largely due to more competitive pricing, simpler solutions and partnerships with key vendors in the channel, including Just Add Power, URC and Access Networks.
Pakedge had approximately $18.5 million in sales for 2015. Control4 paid $32.7 million in cash for the property.
Terms of the Legrand/Luxul deal were not disclosed.
John Selldorff, president and CEO of Legrand North and South America, tells CE Pro that the timing of Legrand’s announcement and relative proximity to Control4’s is just coincidental, but does speak to the market demand and critical integration of wireless networking within today’s home technology infrastructure.
“We have been involved in discussions with them … this dates back to last year,” he says. “From where we sit it’s a coincidence that both the lead companies in this space that we’re focused on would happen to be sold in such short order,” Selldorff says. “As technology’s moved digital, people are relying more and more on third-party networks to be there, people assume they’re there — the Internet of things [IoT] is only functional if the technology is there to allow the communication to occur, and that’s assumed.”
Selldorff continues, “Being in the control business, our biggest frustration is getting calls, ‘Your product doesn’t work.’ Well, it’s not our product; the network wasn’t robust enough to handle the application. So it’s an important space, it’s a space where you look at the audio and video content and the bandwidth that they consume when you want to have control be there as well and be responsive so you don’t get latency, these companies [Luxul and Pakedge] were very smart to have identified this as an area to develop special-purpose products.”
For its part, Luxul acknowledges that it's talked to many suitors over the past couple of years, but Legrand was the best fit because the organization would continue to let Luxul operate as usual, while bringing new channels and new customers into the business.
“We really liked Legrand because they let us operate very independently,” Luxul president and CEO Jeffrey Curtis tells CE Pro. “We wanted to make sure our allegiances would not be tied to any one technology or any one company.”
So Luxul will go on serving integrators no matter what home automation or A/V systems they are using. There are no substantive changes planned for Luxul, says Curtis, other than the addition of the “by Legrand” tagline and some deep pockets for product and market development. He adds that reps will remain in place and the sales structure remains unchanged.
In addition, Curtis says Luxul will benefit from Legrand's leadership in several industries and product categories from commercial lighting controls to A/V equipment racks.
“They have components that can go into every type of project,” he says.
How Luxul Fits into Legrand
The addition of Luxul fits in with other Legrand-owned technology properties whose products and systems touch the network including NuVo Technologies audio systems, Vantage and On-Q home automation, Middle Atlantic intelligent rack systems, WattStopper lighting control, QMotion shades (acquired by Legrand in December 2015) and others.
Selldorff notes that there are no expected organizational changes, but explained that Luxul falls within the company’s electrical wiring division and as such Luxul president and CEO Jeffrey Curtis will report to Brian DiBella, president, Electrical Wiring Systems at Legrand North America. DiBella reports to Selldorff.
“Luxul is the leader in this space in our minds, they have a strong dealer network and they serve that channel very well. So we don’t have any intention to change that; what we do is we tend to do is to make that transparent to the customer,” says Selldorff. “Where On-Q and NuVo sit today is in our electrical wiring systems division, that simply means it’s a division that’s principally served through two-step distribution and that’s very true with Luxul, they sell a lot through distributors or third parties, so that’s why it fits naturally there but it will be a standalone unit.
Likely the main noticeable change might be seeing a “by Legrand” following the Luxul Wireless name and the familiar Legrand logo on Luxul’s website at some point. Otherwise, in terms of dealer perspective Selldorff explains that any overlap between Luxul dealers accessing and specifying more Legrand company products and vice versa will arise as more of an opportunistic market advantage than a forced one.
“Cleary we’ll know who [Luxul dealers] are and they’ll know who we are, and hopefully that will open the door to conversations if we’re not already doing business together. The reality is we don’t have 100 percent of the market doing controls and it would be silly to block Luxul from being able to service customers who might have chosen different controls providers for their solutions, and conversely the same, we won’t be forcing the networking solutions on any of our existing dealers,” Selldorff says. “We just know that most of them already buy it from [Luxul] because it’s a good product.”
It’s been a busy week for Legrand, which just five days earlier announced the acquisition of Pinnacle Architectural Lighting, a leading commercial building lighting solutions provider. And on Monday at its West Hartford, Conn., facility that’s been home to the company’s Wiremold cable and wiring management brand for more than 100 years, Legrand held a ceremony to announce the launching of a fuel cell that will provide 88 percent of the 263,000-square-foot building’s power as part of the company’s environmental sensitivity and sustainability efforts.
Additionally, the QMotion brand was bought by Legrand only last December, in another move that illustrated the company’s attraction to specialized, custom-focused brands that are on the rise. Like Luxul, QMotion had gained traction with the CE Pro 100 according to the Brand Analysis in 2015.
The bottom line for integrators when it comes to networking providers such as Luxul and Pakedge is that not only are the manufacturers themselves continuing to deliver products that facilitate sales growth and installation comfort in this growing category, but they are now being backed by companies that can offer even more resources for innovation.
“They’ve [Luxul and Pakedge] come in at a good price point for a functionality that was needed by this marketplace, and so they’ve enabled the market to grow. People who were scared of taking on networking feel confident that they can,” says Selldorff. “That in our mind is really what separates the company we’re buying from everyone else — in our mind they’ve done the best job of making it easy, simple, reliable for — and I’ll use the term broadly — the integrator, but whether it’s a dealer, an electrical contractor, or someone that’s truly a specialized solutions provider to have something that they can count on.”