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Nortek to buy 2GIG for $135m

Deal includes five-year supply agreement with Vivint

PROVIDENCE, R.I.—Nortek, parent company of Linear, announced this morning that it will acquire 2GIG Technologies for $135 million.

Numera releases activity tracking platform EverThere

Company’s acquisition by Nortek Security & Control adds backing for Numera

SEATTLE—Numera is rolling out EverThere, a new proactive activity tracking platform attached to its Libris mPERS, allowing users or family members to track activity levels, note trends and set alerts.

Will UTC buy Nortek?

Wednesday, August 26, 2015

Will UTC buy Nortek?

The Wall Street Journal, citing unnamed sources, says it's in talks to do so for around $1.2 billion. I talked to some folks in the past few days who say the purchase, which may not make sense on the surface may indeed make sense. Other financial reports, such as the Motley Fool, concur.

Nortek is the parent company of well known access control, security and automation brands Linear, 2GIG and Go!Control. Those brands fall under the Nortek Security and Control division. It's  a global diversified company with a current market cap of $1.3 billion and an enterprise value of $2.7 billion, and the bulk of Nortek’s business falls outside security, it also does HVAC, air management and AV.

Based in Hartford, Conn., United Technologies Corporation is a global $81 billion company that makes building systems and aerospace industry products. Its segments include:  Otis elevators; Pratt & Whitney;  UTC Aerospace Systems and UTC Climate, Controls & Security, which in addition to security does HVAC and refrigeration. UTC owns access control provider Lenel (as one person I spoke to called it--the darling of the UTC security portfolio) and intrusion and smart home provider Interlogix.

UTC bought GE Security in 2010. Here's a Q&A we did at the time.  Two years later, UTC sold its fire and security integration business (Red Hawk) to a private equity group.

UTC recently sold its Sikorsky helicopter division for $9 billion, so they've got money to invest.

Neither Nortek nor UTC are commenting, but plenty of folks outside of the businesses are talking about it.

People I spoke to said that UTC went looking for Nortek—Nortek was not actively looking for a buyer. They don’t believe that it is the security part of the business that is necessarily driving the deal—but rather, the fact that Nortek’s lines of businesses line up with UTC’s Climate Controls and Security division, though there would definitely be some overlap with 2GIG and Interlogix.

As The Motley Fool explains it, what's driving the deal is that the numbers make sense.

From the report: “…Nortek could be a pretty nice bargain. Bought for today's $1.4 billion valuation, Nortek would cost UTC less than 0.6 times Nortek's annual sales. UTC stock, in contrast, costs more than twice as much, at 1.3 times sales.
Meanwhile, although it earns no net profits, Nortek does earn operating profits (i.e., it would have been profitable but for the cost of interest, taxes, and various one-time items). In fact, at its current operating profit margin, Nortek earned about $123 million in operating profit on its revenues last year. If, after buying Nortek, UTC is able to improve the latter's operations so as to extract something like the 16.5% margin that UTC's own Climate, Controls, and Security business achieves, then this would work out to $413 million in annual profits from UTC's new subsidiary -- $290 million better than Nortek made on its own.”

Will the deal happen? I have no idea. But I guess I need to be prepared for another ISC West booth visit where I have to learn, again, how the UTC security business has been realigned.


Nortek Security & Control buys Numera for mPERS

With acquisition, company will be on forefront of ‘aging in place,’ president says

CARLSBAD, Calif.—Nortek Security & Control has purchased Numera Inc. for a reported $12 million.

Got design in mind?

Wednesday, May 20, 2015

You’ve heard the old real estate sales mantra: “Location, location, location.” For many in the residential security industry today, the new mantra is “Design, design, design.” 

At ISC West this year I met with a long list of security pros, from manufacturers to dealers to providers, most of whom proclaimed that on top of tech advancements their equipment was made “to look good.” 

They’re right. Their designs are looking good.

Panels, switches, sensors and more are sleek with a European-design feel. They will be less than obtrusive when mounted on a wall. No more huge black or brown boxes in the front foyer—these blend in. 

The equipment, mostly white and thin, reminded me of the first, very early, iBook I owned. So pretty and neat, small and clean. That was a number of years ago, and my iBook eventually met its demise, but I still remember it fondly, mostly for how it looked in comparison to other bulky laptops of the day. 

“This is the year of industrial design,” Avi Rosenthal, board member of the Z-Wave Alliance and VP of security and control for Nortek, told me early on at the Las Vegas show.  His comments resonated as I visited other booths after that. 

For homeowners, form is equally as important as function for all products, he and others said.

“It’s the ‘wife-acceptance’ factor. She’s the one who decorates, so the devices must look cool on the wall,” Rosenthal said.

Who wants something big, dark and ugly hitched to the wall just inside their front door? Not me. Neither did former ADT exec Christopher Carney when deciding on the look of his new Abode home resi system.

The pursuit of aesthecially pleasing design extended into the ISC West booths themselves this year. Honeywell, for example, had all of its products—from fire to resi—on interactive display in one big, nicely appointed space—think of an Apple store. 

Nortek had a new, interactive booth, too, with each of its sister companies representing myriad slick-looking products. 

How big a deal is this whole aesthetics thing to you and your companies? Are you feeling the need to adapt to the latest trends in home décor? Are you hearing this from your customers? 

If your products are less than pretty, you might want to consider how good design might add to your bottom line.

Nortek takes new approach

Rosenthal: After rebranding, Linear, 2GIG and Go!Control subsidiaries will work together

LAS VEGAS—Nortek Security has acquired a number of companies over the years, including Linear and 2GIG. As a holding company, Nortek mostly allowed those companies to do business as they saw fit.

Vivint launches own panel, own platform in new solution

Vivint Sky not the limit—Vivint’s goal is to ‘control anything and everything’ in the smart home; Vivint beta testing Internet service as well

PROVO, Utah—Vivint today launched Vivint Sky, a new cloud-based smart home solution featuring the company’s own control panel and software. The company anticipates a gradual migration of its more than 800,000 subscribers over to Vivint Sky from the 2GIG Go!Control panel and the software that they currently use.

Linear execs: 2GIG still innovating

Wednesday, August 21, 2013

2GIG is still innovating. That's the message I got yesterday from a briefing with Bruce Ehlers, SVP engineering for Linear, and Mike O'Neal, Linear president. It's also working with some providers it did not work with previously. The 2GIG panel has historically worked with software. Ehlers and O'Neal emphasized that it still works with, but it now also will work with iControl, Telular and Uplink.

"We are not walking away from We have a strong relationship with But, we're now providing an alternative [for dealers] who want an alternative," O'Neal said.

You'll remember that Linear's parent company, Nortek, aquired 2GIG in February. Here's that story. Linear and 2GIG's relationship goes back to 2007, however, when the companies began working together to develop the Go!Control panel. Once it was developed, Linear manufactured the panel, and it continues to manufacture it today.

2GIG and summer-model giant Vivint have always been separate companies, but they had the same owners until the Nortek acquisition in February. Now, "Linear and 2GIG are one and VIvint is a customer, one that we intend to support for a long time, but a customer," Ehlers said.

One of the benefits of the acquisition, Ehlers said, is that there was a perception previously that dealers who bought the 2GIG product were buying a Vivint product. The perception is going away, particularly as Linear continues to develop new feature sets for the panel and to develop new partnerships, Ehlers said.

O'Neal said there was some concern six months ago that "somehow Linear would pull the 2GIG product in and rest on our laurels of the past. But what you're seeing now is that we're taking the product further. In the next six to 12 months you'll see more innovation than what you've seen in the past. Bruce and his team are taking the historical product well beyond where it has been."

"Linear is investing in the innovation that was the hallmark of VIvint and 2GIG in the past. We're not taking our foot off the pedal," O'Neal said.

The acquisition and separation from Vivint "is opening up a pent-up demand for 2GIG," he said. More dealers are signing up and non-Vivint sales of the 2GIG panel are 30 percent ahead of where they were one year ago, according to O'Neal. The company is also recruiting 50 engineers to work on this and other Linear products, he said.