Control4 expects the acquisition to contribute to revenue growth, but primarily its an acknowledgement that networks are the foundation of everything connected and that most home networks today are not fully ready for the expanding requirements of a truly connected home.
During its earnings call today, Control4 revealed that it had acquired Pakedge Device & Software Inc., the supplier of advanced networking products and cloud network-management services, for approximately $32.7 million in cash. The deal was finalized on January 29, 2016.
Control4 expects the acquisition to contribute to revenue growth, but primarily its an acknowledgement that networks are the foundation of everything connected and that most home networks today are not fully ready for the expanding requirements of a truly connected home. Pakedge, Control4 believes, will enable its dealers to supply “seamless, scalable, reliable, and secure networks as a foundation for use in any connected home or business.”
“The connected consumer, connected home, and connected business opportunity is expanding along with the complexities of supporting thousands of different devices and services in homes and business around the world,” said Martin Plaehn, Control4 chairman and CEO. “By embracing networking as an expanded core competency, integrating it tightly with our entertainment and automation capabilities, and delivering a single cloud-based reporting and management solution, Control4 will be able to harness the expanding opportunity, bring more simplicity to the complicated, and increase satisfaction for our end customers.”
Like Control4, Pakedge conducted their business through a broad channel of around 1,700 independent dealers, of which only one third (560) are currently certified Control4 dealers, presenting Control4 with an opportunity to grow the Pakedge product sales through the Control4 dealer network while adding an additional 1,100 new dealers. Pakedge had approximately $18.5 million in sales in 2015.
Control4 intends to fully support the Pakedge product line for all Pakedge dealers, regardless of whether they are also Control4 certified-dealers. Pakedge dealers will continue to order product from the Pakedge dealer portal while Control4 dealers will now be able to order the most popular Pakedge products via the Control4 dealer portal, which will expand to offer the full Pakedge line in the near term. The combined company intends to grow both the Pakedge and Control4 businesses through a combined dealer channel of more than 4,700 dealers. All qualified dealers will be encouraged to explore both product-lines, and the combined Control4 and Pakedge team intends to actively cross-train and cross-certify dealers who desire to represent both product lines but are currently only qualified for one.
Pakedge brings to Control4 deep networking expertise and a suite of networking products and rich software capability, as well as integration with a growing list of third-party products. The Pakedge firmware running within their products and their cloud-service software enable dealers and homeowners to monitor, configure, and reset their home networks.
Pakedge Connect+ is a network platform comprised of wired and wireless products that are integrated through advanced software and connected to the cloud. Connect+ incorporates proprietary artificial intelligence-based algorithms to detect, diagnose, self-repair, and resolve network problems.
Pakedge virtualization technologies enable network devices, whether within a single network or across multiple networks, to be uniquely grouped and managed in new ways. Pakedge advanced software, such as Pakedge Zones, creates new networking capabilities for prioritizing network use for audio, video, communication, security, bulk-data, and management applications.
The brand’s cloud-based management technology, BakPak, enables remote management and maintenance. The Pakedge platform-architecture approach enables scalable and tightly defined integration with third-party devices from many manufacturers, similar to how Control4’s architecture enables third-party products to integrate with its platform.
“Pakedge began 12 years ago with the strategic vision that everything, starting with audio-video systems, will be connected over an IP-based platform,” said Victor Pak, Pakedge founder and CEO. “Our success was driven by a combination of customer focused innovation, engineering excellence, and passionate customers. Control4 shares our corporate philosophy and strategic vision. Joining together is a logical and exciting step to accelerate the realization of that vision for our customers.”
The Pakedge founders, senior management team, and broader organization are joining Control4. The Pakedge teams in Huntington Beach and Hayward, CA, and its independent development office in Belgrade, Serbia, will begin working together with Control4 to create, market, and support products for the connected smart home and business.