Control4 Acquires Pakedge: A Perfect Merger of Home Automation and Networking – Security Sales & Integration
In what may be the smartest acquisition ever in the home-technology channel, leading smart-home manufacturer Control4 (Nasdaq: CTRL) has acquired Pakedge, the No. 1 brand of networking gear among CE Pro 100 home-technology integrators.
The synergies are clear to anyone with the vaguest understanding of the home-technology integration market:
- Control4 makes mid-market systems for home automation and multiroom audio/video distribution.
- Pakedge makes robust networking gear optimized for smart homes.
- Both companies sell directly to independent dealers who sell, install and support connected-home (and commercial) systems.
- Both firms are tops in their respective categories among CE Pro top 100 dealers.
- Most dealers who install custom home-control systems like Control4 also spec, install and support the network infrastructure as well.
- Pakedge has about 1,700 independent dealers, of which 560 are Control4-certified dealers.
- Control4 has about 3,100 dealers in North America, of which 500 are currently Pakedge dealers.
A couple of weeks ago, when Control4 announced its new EA Series home controllers, CEO Martin Plaehn told CE Pro that Control4 was more of an infrastructure provider rather than a smart-home device manufacturer.
To that end, Pakedge makes a perfect partner.
â€œWe now have Pakedge joining the family with networking solutions that are really designed to scale,â€ says Jeff Dungan, senior VP, supply chain and business development for Control4. â€œNetworking is the foundationâ€”making sure everything in the home communicates well together. Especially as thereâ€™s more downloadable content, more high-definition streaming services, the network becomes even more critical.â€
Control4 paid about $32.7 million in cash for Pakedge, which had approximately $18.5 million in sales in 2015. Control4, which reports 2015 earnings today, had revenues of $120 million for the nine months ended Sept. 30, 2015. Control4 expects the acquisition to contribute to revenue growth, and to be accretive to both gross margin and EPS on a non-GAAP basis for the full-year 2016. Pakedge adds about 80 employees to Control4â€™s original 540 staffers.
Control4 has been vocal about its desire to grow through acquisitions. Last year, it purchased Leaf, a manufacturer of high-performance A/V-distribution products, for $9 million. A few months earlier, it acquired home automation software partner Extra Vegetables for about $900,000.
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