Now Public, Control4 Has ‘Lot of Assets’ for Would-Be Acquisition Targets
The home automation industry needs “a strong leader” in innovation, presence and business execution, Control4 CEO Martin Plaehn told Consumer Electronics Daily Friday, the first day the home automation company began trading on the Nasdaq. With the initial public offering, the company “has the tools” to fill that role, Plaehn said.
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Control4 went public “for deliberate business reasons” and has “no selling shareholders,” Plaehn said. “It wasn’t about that people want out or liquidity,” he said.
Citing “very early days” in the home automation industry, Plaehn said the company will remain focused on making homeowners’ “connected world work together better.” More connected devices are coming into consumers’ lives “every month,” and the world is “not going to be less connected” a year from now or five years from now, he said. Competitors in the home automation space are at “various stages of progress,” he noted, and Control4 “doesn’t have an exclusive lock on innovation,” he said. On acquisition possibilities, Plaehn said the company has “a lot of assets” it can bring to “small teams, medium sized teams, or maybe even a large one.”
Cisco remains a Control4 investor following the IPO and the companies have an OEM agreement with Cisco on smart and connected cities primarily in Asia, Plaehn said. Under that agreement, Cisco can rebrand Control4 products as Cisco-labeled products powered by Control4, he said. After a three-year deal, the companies are redefining how the relationship can “optimize” the long-term opportunity of smart and connected cities, which Plaehn called “very real, very large.” How two companies work together “is always a refinement,” he said, saying Control4 wants to serve the connected cities opportunity efficiently and “in a rapid way."
Control4 plans to continue its retail relationship with Best Buy through its Magnolia Design Center and Magnolia Home Theater stores, and it’s looking for other “high-touch consultative selling retailers” selectively, on a “one by one basis,” he said. Control4 has 2,800 certified dealers worldwide and remains committed to that channel, he said. “These dealers provide enormous value to the end-customer and the ecosystem that’s required to build an industry,” he said, adding that they'll “be here for a long time."
On Control4’s future course to market, Plaehn said the company is focused on the most direct route to the consumer. “To the extent there are utility companies” in the customer mix of some of its dealers, “that could be interesting,” but the company’s “sole priority is finding the most direct and high-service path to provide our products to end customers,” he said.
Speaking to the opportunities ahead, Plaehn said “five years from now I can’t imagine houses that don’t have some form of digital intelligence between multiple devices.” Control4 will be one of those providers “and hopefully the most influential” in whole-home automation, he said. Market potential is “tens of millions of homeowners around the world,” he said. “It will take a long time before we saturate that opportunity,” he said.
Control4 set pricing of its 4-million-share IPO at $16 a share. The stock, trading under the ticker “CTRL,” opened Friday at $18.89 and reached a high of $20.70 midday before ending the day at $19.80 on volume of 3.8 million shares.