Hours after the Federal Trade Commission (FTC) waiting period for the merging of Alarm.com and two units of Icontrol Networks ended, Honeywell filed suit on February 22, 2017 against Alarm.com and Icontrol for an alleged violation of antitrust laws.
In June of 2016, SDM reported that Alarm.com Holdings Inc. had 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.
The pending acquisition, including Icontrol’s Connect unit that supports large providers including ADT, was pending during a customary waiting period with the FTC. That waiting period expired at 12:01 a.m. on February 22, 2017. Later that day, Honeywell filed suit.
According to an 8-K form released by defendant Alarm.com, “Subsequent to expiration of the HSR Act waiting period, on February 22, 2017, Honeywell International Inc. filed an action in the United States District Court for the District of New Jersey against Alarm.com and Icontrol seeking to enjoin the Acquisition as a violation of the antitrust laws.”
Honeywell claims in the suit that such a merger would impede the ability of Honeywell and other companies to transition into an open architecture, stating, “With the merger, the combined Alarm.com/Icontrol firm would foreclose Honeywell’s transition to open architecture. Instead of three open architecture alternatives and genuine competition, there would be one dominant firm exercising monopoly power over customers and stymieing any nascent competitive threat.”
Honeywell alleges in the complaint that this merger will allow Alarm.com to convert ADT to Alarm.com software, essentially shutting out any further relationship between ADT and Honeywell since Honeywell hardware is not compatible with Alarm.com software.
In the complaint, Honeywell also alleges: “The creation of such concentration, which would injure competition, stifle innovation, and result in higher prices to consumers, is presumptively illegal.”
In the 8-K form, Alarm.com states: “Alarm.com intends to defend itself vigorously in this matter.”
This is a developing story; check back often with SDM for updates.