Alarm.com Holdings Inc. has entered into a definitive agreement to acquire two business units, Connect and Piper, from Icontrol Networks for $140 million, and Comcast has agreed to acquire Icontrol’s Converge software platform.
Connect, based in Redwood City, Calif., provides an interactive security and home automation platform that powers several service providers’ solutions including ADT Pulse with more than 1.6 million subscribers. Piper, based in Ottawa, Canada, designs, produces and sells a Wi-Fi-enabled video and home automation hub.
The Connect and Piper units from Icontrol offer technology infrastructure, talent, key relationships and new hardware devices that are expected to complement the Alarm.com platform and help accelerate innovation, Alarm.com reported in a press release..
“This acquisition will enhance our research and development scale so that we can continue to deliver long-term value to our partners through innovative technology,” said Steve Trundle, president and CEO of Alarm.com. “We look forward to welcoming the Icontrol team and to building upon the solid relationships within their customer base.”
Alarm.com expects to fund the transaction with a combination of cash on hand and debt available under the company’s credit facility. It expects the acquisition to contribute to revenue growth and be EPS accretive on a non-GAAP basis for the full-year 2017.
Raymond James acted as the financial advisor to Alarm.com on this transaction.
As well, Comcast has agreed to acquire Icontrol’s Converge software platform, which powers the Xfinity Home touchscreen panel and back-end servers, allowing them to communicate with and manage security sensors in the home, as well as supporting home-automation devices such as cameras and thermostats.
Dan Herscovici, senior vice president and general manager, Xfinity Home, said, “Icontrol has been an important technology partner for Comcast since the launch of Xfinity Home in 2010. Icontrol has been innovating around the Internet of Things since it was founded in 2003, and built edge-based platforms and technologies that support connected home security for not just Xfinity Home, but for a number of leading MSOs. We look forward to continuing to serve customers using the Converge software platform and to growing Icontrol’s wholesale business by accelerating the development of new services and features.”
Herscovici said Comcast plans to invest in the continued development of Converge: “As this business becomes part of Comcast, we will strategically invest in its technology and technologists, so that we can deliver new features, products and services to both individual Xfinity Home customers and enterprise-level Converge customers, faster than ever before.”
Herscovici said the Icontrol employees in Austin, Texas, who are joining Comcast will make up a new Comcast engineering center of excellence in Austin. He explained that the team will work closely with Comcast engineers in Philadelphia and Silicon Valley to build “simple, elegant and powerful connected-home and connected home security products for our customers.”
“We’re excited to welcome this impressive team of technologists into Comcast,” he said, “and look forward to what comes next.”
Alarm.com reported it expected to provide further details on the anticipated financial contribution from the acquired operations following closing of the transaction, which is expected to be completed by the end of 2016 and is subject to customary closing conditions, regulatory approvals as well as the closing of Comcast’s acquisition of Icontrol’s Converge business unit.