Providence, R.I. – Nortek, owner of multiple commercial and residential technology brands, signed a definitive agreement to acquire 2GIG Technologies, a privately held supplier of residential security and home-automation products.
The acquisition will “further our investment in home security” and “position us to participate in the lower end home-automation market,” Nortek senior VP/treasurer Ed Cooney told TWICE.
The acquisition will also open up cross-selling opportunities with Nortek’s commercial and residential brands, said Mike O’Neill, president of Nortek’s Linear business.
Linear, part of Nortek’s Technology Solutions Group of residential and commercial brands, is already a major supplier of wireless residential security systems, access control, intercoms, garage door openers, gate openers, and the like.
For its part, Utah-based 2GIG markets a self-contained home security and automation control panel, which was developed with the aid of Linear. 2GIG also sells wireless home security as well as home automation products, including home thermostats, alarms and wireless carbon-monoxide detectors.
2GIG supplies products to Vivint, one of the largest home-automation services companies in North America, Nortek noted. The acquisition agreement with 2GIG includes a five-year supply agreement with Vivint.
The acquisition, expected to close in the first half, will make 2GIG a part of Linear, but the 2GIG brand will remain, said O’Neill.
Nortek’s Technology Solutions Group consists of Linear, CORE Brands, and professional AV companies. Nortek’s other groups include residential and commercial HVAC brands.
2GIG cross-selling opportunities exist with many of Nortek’s commercial and residential brands, which offer products that could potentially link to 2GIG products, said O’Neill. Products range from Braun residential ventilation fans, products from the CORE Brands group of A/V brands, Linear garage-door openers, energy-management products, access-control products, and the like, he said.
Existing Nortek brands will be able to use 2GIG products to “grow their business with existing customer accounts” via cross-selling opportunities, added Sean Burke, group president of Nortek's Technology Solutions Group. Those brands already offer products “that can expand and enhance the 2GIG home automation platform, potentially opening doors to new market opportunities," he said.
"Acquiring 2GIG will position our Technology Solutions business as one of the world's top-tier hardware developers and manufacturers in the rapidly growing residential-security and home-automation markets," said Nortek CEO Michael J. Clarke. "The transaction allows us to better provide long-term support to Vivint and other 2GIG customers.”
The purchase of 2GIG from APX Group is valued at around $135 million and will be financed by a combination of cash on hand and borrowings under Nortek's asset-based credit facility.