Don’t Miss Your Chance to Enter the 2019 CE Pro BEST Product Awards
Control & Automation

Big SnapAV, Control4 Merger-Acquisition: 16 Questions from JJ

Just prior to interviewing SnapAV and Control4 CEOs, CE Pro's Julie Jacobson offers up 16 questions about the merger/acquisition of two home-tech giants.

Big SnapAV, Control4 Merger-Acquisition: 16 Questions from JJ
CE Pro's Julie Jacobson preps questions for SnapAV and Control4 CEOs John Heyman (left) and Martin Plaehn.

Julie Jacobson · May 9, 2019

I have just a few minutes before my interview with SnapAV about their (impending) acquisition of Control4 (Nasdaq: CTRL), a leading home-automation provider and the only one in its class that is publicly listed. And then there will be none.

Its “class” is the mid- to -high-end market for integrated smart-home systems, networking, audio, video, lighting control, energy management and other home-technology solutions installed by authorized dealers, never direct-to-consumer.

The two companies announced today before the opening bell that they would "merge," with SnapAV acquiring the Control4 in an all-cash transaction for $23.91 per share. 

CTRL is now trading at $24, up $6.88 or 40.19% for the day.

Stay tuned for the interview ...

Here are some M&A questions to get the ball rolling ...

1. Do you remember this one from mid-2017? Rating the Prospects: After Acquisition of SnapAV, What Major Home-Tech Co. Will H&F Buy Next? I believe I gave Control4 the highest chance (8 out of 10) of being acquired by SnapAV or its private-equity owner Hellman & Friedman. Do I get a prize?

2. The rumor about SnapAV acquiring Control4 – or vice versa – has been swirling for many years. Have the two companies been negotiating all that time? Presuming so … why now?

3. What does Control4 think it can gain from SnapAV and vice versa?

4. Now that SnapAV owns a few distributors and presumably will acquire more for national coverage, will Control4 find its way into distribution?

5. Control4 hired Charlie Kindel, a key architect of the Amazon Alexa smart-home initiative, less than one year ago. Was the SnapAV plan in play then, and is there a specific role for him in the combined company?

RELATED: H&F Acquiring SnapAV Not Just to ‘Accelerate Growth’ But to Do Something Huge in Home Tech

6. Control4 has remote-systems monitoring and management platforms through its own Pakedge networking group, as well as the dedicated remote provider ihiji acquired last year. How will those services play with SnapAV’s similar service OvrC, which easily has the largest market share and mind share in the channel?

7. There doesn’t seem to be too much overlap in products between the two companies except for networking gear, which is a biggie. Is there a reason to continue developing and supporting both Pakedge and SnapAV’s offerings?

8. SnapAV recently teamed up with Clare Controls for home automation. While Clare has a more mass-market focus, it does compete with Control4 fairly effectively for many in a whole lot of ways. How will SnapAV reconcile the two business?

9. Similiary, both Control4 and Clare are chasing home builders. How will that business be divvied up?

10. Was the forthcoming merger the reason you didn’t outright acquire Clare?

11. I always wished Control4 would have a user interface like Clare, which provides so many personalization options for end users. Control4 is getting closer, but even with it’s IF/Then/When engine doesn’t quite compare to Clare’s elegance in this area, I don’t believe. Will Control4 exploit Clare’s UI expertise and implementations?

12. SnapAV demonstrated a pretty sweet self-contained security and Z-Wave home-automation system last month at ISC West. They already mentioned it would integrate with Control4 (and others). Do Control4 and Clare have big plans for the panel through their respective channels/product integrations?

13. I guess it’s now clear why Control4 hasn’t acquired a surveillance camera company over the years, right? SnapAV has a strong offering including Visualint for video analytics. What kind of role will those cameras take in the Control4 world?

14. With Control4 so strong in Europe, will we finally see SnapAV tapping that market?

15. Will you miss being a public company, sharing all your business intelligence, investing so many resources filing papers, and trying to meet investor/analyst expectations every quarter?

16. Which analyst will you miss most?

RELATED:

Control4 Acquires Ihiji, Will Drop Recurring Fees for Remote Network Management

Rating the Prospects: After Acquisition of SnapAV, What Major Home-Tech Co. Will H&F Buy Next?



We're Looking for Your BEST Projects

Don’t miss your chance to enter to win a 2019 BEST Projects Award. We’ll be announcing winners at a special Gala event at CEDIA EXPO. We can’t wait to see what you’ve been up to this year! Enter your projects now.




  About the Author

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at julie.jacobson@emeraldexpo.com

Follow Julie on social media:
Twitter · LinkedIn · Google+

Julie also participates in these groups:
LinkedIn · Google+

View Julie Jacobson's complete profile.



  Article Topics


Control & Automation · Automation · Business · News · Blogs · Control4 · Mergers and Acquisitions · SnapAV · All Topics
CE Pro Magazine

Read More Articles Like This… With A Free Subscription

CE Pro magazine is the resource you need to keep up-to-date on the latest products, techniques, designs and business practices. Subscribe today!

Subscribe Today!

Comments

Posted by ifeldman on May 10, 2019

I really don’t think the Episode speaker line and Triad really overlap that much, they really target different markets.  I see no reason they both won’t stick around.  There are plenty of speaker companies out there with multiple lines, for example Nortek has Proficient, Speakercraft, Sunfire, and Niles.

On the networking side I see more competition there but they also hit different price points and in my opinion both have their deficiencies.  Maybe more people working together on a single platform will get both lines up to where they should be.  I suspect they will join forces and create a comprehensive product line under the Pakedge brand.  Still waiting for ihiji integration, bakpak sucks and OvrC really excels for its own products but not 3rd party.

I see larger competition/conflict of interest in Clare/C4, Binary vs C4(leaf) Video Distribuion, and Autonomic vs C4 Audio.  I’m also concerned about distribution and bringing more C4 dealers on, snap sells to everyone, C4 does not.

Hopefully this will be the kick in the pants/investment C4 needs to truly get its 3rd gen product line out.  Everything has been so stagnant for years its getting embarrassing.

I really expected Amazon to be the billion dollar buyer.

Posted by gregc pghcustomht.com on May 10, 2019

Julie, you missed a HUGE overlap. C4 owns Triad Speakers. Snap has both contractor grade and their step up speaker line. I sure hope that either Triad gets spun off, or is run independently from Snap.

Posted by 7220consulting on May 10, 2019

I’d personally like to know what’s going to happen between the Triad and Episode audio brands. I actually think Triad is more competitive and am really hoping that they stick around. In particular, the factory paint matching of grilles and speakers has proven to be very popular in my market and I don’t have to figure out how to get paint-matching done locally at much higher costs.

Posted by Galegão on May 9, 2019

Credit where credit is due. Way to connect the dots and call it Julie.

Control4 was the ONLY potential acquisition target in your story that received a 8/10 score or higher than a 6.
I’m guessing talks between Control4 and SnapAV/H&F began a month or two after C4 acquired ihiji at the tail end of 2017. Which means that Charlie was made well aware of this potential scenario when he joined them 9 months ago.

It’s not a done deal –But who has a billion bucks to steal Control4 from Snap?

Posted by Galegão on May 9, 2019

Credit where credit is due. Way to connect the dots and call it Julie.

Control4 was the ONLY potential acquisition target in your story that received a 8/10 score or higher than a 6.
I’m guessing talks between Control4 and SnapAV/H&F began a month or two after C4 acquired ihiji at the tail end of 2017. Which means that Charlie was made well aware of this potential scenario when he joined them 9 months ago.

It’s not a done deal –But who has a billion bucks to steal Control4 from Snap?

Posted by 7220consulting on May 10, 2019

I’d personally like to know what’s going to happen between the Triad and Episode audio brands. I actually think Triad is more competitive and am really hoping that they stick around. In particular, the factory paint matching of grilles and speakers has proven to be very popular in my market and I don’t have to figure out how to get paint-matching done locally at much higher costs.

Posted by gregc pghcustomht.com on May 10, 2019

Julie, you missed a HUGE overlap. C4 owns Triad Speakers. Snap has both contractor grade and their step up speaker line. I sure hope that either Triad gets spun off, or is run independently from Snap.

Posted by ifeldman on May 10, 2019

I really don’t think the Episode speaker line and Triad really overlap that much, they really target different markets.  I see no reason they both won’t stick around.  There are plenty of speaker companies out there with multiple lines, for example Nortek has Proficient, Speakercraft, Sunfire, and Niles.

On the networking side I see more competition there but they also hit different price points and in my opinion both have their deficiencies.  Maybe more people working together on a single platform will get both lines up to where they should be.  I suspect they will join forces and create a comprehensive product line under the Pakedge brand.  Still waiting for ihiji integration, bakpak sucks and OvrC really excels for its own products but not 3rd party.

I see larger competition/conflict of interest in Clare/C4, Binary vs C4(leaf) Video Distribuion, and Autonomic vs C4 Audio.  I’m also concerned about distribution and bringing more C4 dealers on, snap sells to everyone, C4 does not.

Hopefully this will be the kick in the pants/investment C4 needs to truly get its 3rd gen product line out.  Everything has been so stagnant for years its getting embarrassing.

I really expected Amazon to be the billion dollar buyer.