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Home / Business / SnapAV Acquires Control4, Merging Two Leaders in the Smart Home Business

SnapAV Acquires Control4, Merging Two Leaders in the Smart Home Business

  • May 9, 2019
  • 9:08 am
  • Jeremy Glowacki Jeremy Glowacki

Perhaps only the best three-dimensional-chess player could have predicted that SnapAV, a leading manufacturer and source of AV, surveillance, networking, and remote management products for professional integrators, would acquire Control4 Corporation, the global provider of smart home solutions. Although SnapAV (NASDAQ: CTRL) has led its share of acquisitions over the years, Control4 (NASDAQ: CTRL) was the company that seemed most obviously on the path toward world domination in professionally installed smart home products channel.

But there you have it, the announcement that SnapAV will acquire Control4, providing SnapAV with what it calls “the industry’s leading automation platform that integrates with the numerous technologies and products required to create customized smart home experiences homeowners desire” and Control4 with an opportunity to “better serve the expanding smart home market, making the lives of integrators easier and their businesses more effective and efficient.”

The all-cash transaction for $23.91 per share in cash, representing an aggregate value of approximately $680 million. The purchase price represents a premium of approximately 40 percent 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 percent 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.

The companies expect to complete the transaction in the second half of 2019.

In their combined announcement, SnapAV and Control4 acknowledged their shared understanding of and “commitment to the custom installation industry” and dedication “to making professional integrators more successful.” By merging, SnapAV and Control4 will combine their workforce of 1,200-plus employees, products, channel platform, and global distribution and financial resources, maintaining shared headquarters in Salt Lake City, UT, and Charlotte, NC, with offices and local facilities around the globe. 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.

“We have pursued the mission of making our integrators’ lives easier since SnapAV was founded,” Heyman said. “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 centered 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.”

Martin Plaehn, chairman and CEO of Control4, will join the Board of Directors of the combined company, to help “ensure a smooth integration of the businesses.” Plaehn said that merger delivers “compelling and immediate value to Control4 shareholders in the form of a significant share price premium,” and that Control4 is excited to have the opportunity to join with the SnapAV team.

“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,” Plaehn said. “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.”

In their announcement, the companies said that merger will enable product integration, remote management, expert service technicians, product simplification, training, and timely logistical capabilities that will ensure every install is easier, more reliable and delivers fantastic experiences to consumers where they live and work.

“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.”

As part of the agreement, Control4’s Board of Directors, with the assistance of its advisors, will conduct a 30-day “go-shop” process following the date of the execution of the definitive agreement, during which it will actively initiate, solicit, encourage, and evaluate alternative acquisition proposals, and potentially enter into negotiations with any parties that offer an alternative acquisition proposal. Control4 will have the right to terminate the merger agreement to accept a superior proposal, subject to the terms and conditions of the merger agreement.

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Jeremy Glowacki

Jeremy Glowacki

Residential Tech Today’s executive editor Jeremy Glowacki is an editorial veteran with more than 20 years of professional experience with numerous publications. In 2000, he helped create and launch Residential Systems, a business and technology magazine for the custom integration business. He served as day-to-day editor of that title and content director of the CEDIA Daily, Systems Contractor News, and several other B2B titles until joining Innovative Properties Worldwide in 2018. Jeremy was named a CEDIA Fellow in 2012.
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