Jordan O'BrienSnapAV is staying true to its name and reputation as being the acquisition master of the custom installation market, and now it’s snapping up yet another company in its never-ending buying spree. Having been purchased by deep-pocketed private equity firm Hellman & Friedman back in 2017, SnapAV has now announced its intention to acquire Control4 in an all-cash transaction of $23.91 per share, valuing Control4 at $680 million – a 40% premium over the firm’s closing price on May 8, 2019.
Control4’s continued growth in the smart home sector became too good of an opportunity to pass up for SnapAV’s management team, and this merger will massively expand the company’s product offering. SnapAV is already a leading manufacturer of AV, surveillance, networking and remote management products for professional integrations, but now it will also offer a huge range of products in the home automation sector – a rapidly growing industry.
Not only is SnapAV buying into Control4’s product portfolio, but the company is also acquiring its large customer base. Control4 has 5,900 independent dealers/integrators worldwide, and that doesn’t only give SnapAV a huge pool of customers in which to tap into, but it also gives the firm a broad geographic footprint.
Of course, as Control4 is a publicly-traded company, the acquisition is still subject to shareholder approval, although the board has given its unanimous support and recommended that stockholders vote in favour of the deal.
John Heyman, CEO of SnapAV, released the following statement about the deal:
“We have pursued the mission of making our integrators’ lives easier since SnapAV was founded.
“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. Control4 offers a leading automation platform, along with key smart home solutions in the audio, video, lighting, security and networking categories. We are especially excited by the fact that both of our companies have similarly strong ‘customer first’ corporate cultures centred on quality, service and innovation, and we look forward to creating new and exciting opportunities for the teams at both Control4 and SnapAV. In sum, the two companies will be better together, with better service, better solutions and better opportunities for integrators and employees.”
Period Of Consolidation
There’s no denying that the smart home industry is going through a period of consolidation, with companies gearing up for a big fight against tech giants with deep pockets. The likes of Google and Amazon are committed to offering much of the functionality that has long been the reserve of a professional system on much cheaper consumer DIY systems, and that has some of smart home industry veterans worried. In order to better compete with the entrants from Silicon Valley, they will now need to combine their knowledge and clout to ensure they can out-innovate the larger firms.
Control4 CEO and Chairman, Martin Plaehn, echoed that strategy in his statement regarding the acquisition:
“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.”
More than 1,200 employees of the combined company will be led by SnapAV CEO John Heyman and an executive team made up of leaders from both SnapAV and Control4. Control4 CEO Martin Plaehn will join the Board of Directors of the combined company, helping to ensure a smooth integration of the businesses. The company will share joint headquarters in Charlotte, North Carolina, and Salt Lake City, Utah, with offices and local facilities around the globe.