In major custom electronics industry news that CE Pro will continue to update and monitor throughout the day, SnapAV, a leading manufacturer and primary source of A/V, surveillance, networking and remote management products for integrators, and Control4 Corporation (NASDAQ: CTRL), a leading global provider of smart home solutions, today announced that they have entered into a definitive merger agreement whereby SnapAV will acquire Control4 in an all-cash transaction for $23.91 per share in cash, representing an aggregate value of approximately $680 million.
UPDATTE: JJ Preps 16 Questions for SnapAV and Control4 CEOs.
This highly complementary combination will leverage the increased resources of the two companies to provide integrators with a true one-stop shop, offering a complete product portfolio of custom smart-home, control and automation solutions, according to the joint announcement from the Charlotte, N.C., and Salt Lake City-based companies.
Together, SnapAV and Control4 will drive increased innovation, simplified integration and compelling solutions that meet the demands of today’s expanding smart home industry, the announcement states.
With leading technology solutions, a broad geographic footprint and exceptional service organizations, the combined company is poised to provide integrators with better opportunities to serve customers in the connected home and business markets.
Deal Fulfills SnapAV's Goal to Deliver Leading Home Automation
The companies' combined impact on the CEDIA channel has continued to reach new heights in recent years.
Besides continuing to roll out its own diversified portfolio of products, SnapAV has been stockpiling distribution companies lately with the recent acquisitions of Allnet, Volutone and, nearly two months ago, MRI.
Meanwhile, Control4 is pushing the home automation boundaries by making forward-thinking hires like former Amazon Alexa guru Charlie Kindel.
Both brands, which have been familiar to CE pros since making big splashes in the mid-2000s, perennially receive huge support from the industry when it comes to CE Pro's Quest for Quality Awards (Control4 won 10 awards this year alone) and CE Pro 100 Brand Analysis.
“We have pursued the mission of making our integrators’ lives easier since SnapAV was founded,” said John Heyman, chief executive officer of SnapAV, in the announcement. “Dealers will be able to buy leading solutions, access the best service technicians in the industry and experience simpler installation through purchasing, support and seamless product integration.
“Over the past several years, we have accomplished a number of goals we felt were critical to the success of integrators and the continued growth of SnapAV—including offering local delivery and pick-up through the acquisition of distribution sites around the country and expanding the suite of products available to support integrators.
“Merging with Control4 and its outstanding team will help us execute on our third critical goal: delivering the industry’s leading automation platform that integrates with the numerous technologies and products required to create customized smart home experiences homeowners desire.”
From the announcement:
Control4’s Board of Directors has unanimously approved and recommended that stockholders vote in favor of the transaction. Under the terms of the Agreement, SnapAV will acquire all the outstanding common stock of Control4 for $23.91 per share in cash. The purchase price represents a premium of approximately 40% over Control4’s closing price on May 8, 2019, the last trading day prior to execution of the Agreement, and a premium of approximately 38% over Control4’s 30-trading day weighted average share price ended on May 8, 2019. Private equity investment firm Hellman & Friedman—SnapAV’s majority shareholder since 2017—will invest additional equity as part of the transaction and be the majority shareholder of the combined company.
1,200+ Combined Employees; CEO Heyman to Lead
By merging, SnapAV and Control4 will combine the talent of their collective 1,200+ employees, market-leading solutions, exceptional interoperability and channel platform, dealer-first programs, global distribution and financial resources to deliver value in ways no one else can — enabling integrators to serve their customers better and grow their businesses, the companies emphasized in the announcement.
“We believe today’s announced transaction delivers compelling and immediate value to Control4 shareholders in the form of a significant share price premium, and we are excited to have the opportunity to join with the SnapAV team,” said Martin Plaehn, chairman and chief executive officer of Control4.
“Together with SnapAV, we will be able to invest even more in innovation, bring together and build upon the very best of our combined capabilities, and do so with improved reliability, responsiveness, security, and privacy for consumers. Today’s announcement will enable us to better serve the expanding smart home market, making the lives of integrators easier and their businesses more effective and efficient.”
The combined company will be led by Heyman and an executive team made up of leaders from both SnapAV and Control4. Plaehn will join the Board of Directors of the combined company, helping to ensure a smooth integration of the businesses.
“The combination of Control4 and SnapAV is transformative for the smart home industry,” said Erik Ragatz, Partner at Hellman & Friedman and chairman of the Board of Directors of SnapAV.
“The increased resources of the combined company will enable it to invest more to drive innovation and deliver best-in-class features, functionality and products. This combination will also allow us to support integrators more effectively than ever before in pursuit of our joint goal of bringing the promise of the connected home to life.”
The transaction, which is expected to be completed in the second half of 2019, is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by Control4 shareholders.
Simpson Thacher & Bartlett is representing SnapAV as legal advisor on the transaction, while Raymond James & Associates and Goodwin Procter are serving as respective financial and legal advisors to Control4.
Letter from SnapAV CEO John Heyman
Less than two years ago, we developed a strategic plan to guide our company over the next decade. There are three key pillars to this strategy that we have been working to put in place:
One, we understand that a local presence is important for product accessibility and personalized service. The acquisitions of leading distribution businesses such as AllNet, Volutone and MRI have given us entirely new capabilities to serve you, and we are planning more locations in the future.
Two, we understand that product choice is essential to creating the right solutions for every project. By partnering with key industry leaders, we are adding important complementary products to our award-winning portfolio.
Three, we understand that providing a true, one-stop shop for all your project needs – one place for products and support – is how we can continue to make your life easier
To accomplish this last objective, we sought to bring you a solution for an integral piece of the smart home experience: the control system. The demand for connected solutions is exploding, and we believe that making a control system better – simpler, easier to customize, and more reliable – will create more demand for your services and allow you to better serve more customers. Today, we are announcing that SnapAV has entered into a definitive agreement to acquire Control4, who we believe is the premier control company in the space. I am incredibly excited to announce this transformational merger of people, products and capabilities.
Like SnapAV, Control4 is highly regarded for their product innovation and customer support capabilities. Independently, both companies have distinguished themselves as “winners” in the industry. Together, this merger represents a combination of strength.
Our mission remains to offer you better service and better solutions to make your life easier. If you do not think we are meeting this mission, please let me know at John.Listens@snapav.com. We believe our industry deserves a provider who invests relentlessly in your success. Whether it is industry-leading solutions, world-class service or time-saving tools like remote management, we strive to be the company with the resources and staying power to help your businesses grow. Simply put, we believe that SnapAV and Control4 will be better together for you.
The closing of the transaction is subject to customary conditions, including the approval of Control4’s stockholders and certain regulatory approvals. We anticipate closing the transaction sometime in the second half of 2019. At that time upon consummation of the closing, we will work to bring the two companies together as one. For now, we will continue to operate separately, and conduct business as usual.
This is an incredibly exciting time in our industry. I thank each of you for the investments you have made in our company over the past 15 years, and for continually challenging us to be an even better company in the future.