Control4 Buying Triad is a Brilliant Maneuver To Success
Last month, Control4 shares jumped 20% on the back of a strong 2016 fourth quarter. The $57.4 million revenue resulted in a 34% increase year over year and outpaced analysts' $54.4 million estimates. Adjusted earnings per share hit $0.31 per share, totaling $7.8 million, eclipsing their 2015 Q4 $0.07 per share.
All this makes Control4's newest acquisition a very natural next step, something that Control4's President and CEO Martin Plaehn said.
"One thing that is probably not as visible or widely known is that Control4 has been in the audio experience business for a long time," Plaehn said. "We provide end-to-end solutions for multi-room audio and audio in family rooms; whether that's a music listening experience associated with watching TV, movies, and even gaming. It's also solutions in home theaters, and we've been doing that for over a decade."
The move is mutually beneficially for Control4 and Triad, but will also deliver "value immediately to Triad business" by offering an online catalog for dealers in the form of a brand new portal that went live alongside the March 1 acquisition. Plaehn is thrilled for dealers to process orders at their convenience and not worry when Triad's Portland-based office can process a transaction.
Control4 will acquire not only the full line of products but also a majority of Triad's team, including R&D, manufacturing, custom services employees, and Triad founder Larry Pexton.
After a meeting at ISE in Amsterdam last year, the notoriously tight-lipped Control4 had a few conversations with Pexton and their own internal advisor. This conversation set the stage for what he is calling a perfect union, especially because Control4's "EA-5 controller just begs for quality speakers to be connected to them."
"It's such a good cultural fit that is almost scary," Pexton said. "They think the same we do; their people have the same values that we do. Their people have the same work ethic or better than we do. It doesn't feel like its going to be much of an adjustment at all and in the last few years, they have really upped their game in audio quality."
"It's going to up the game for a lot of installers in a lot of parts of the world, pretty quickly," he added.
Pexton is confident that Triad's expertise will not only educate installers but make them more self-sufficient as well.
"We're going to make available our ability to help installers design rooms, especially for Dolby Atmos where we probably specced and implemented more rooms than anybody else," Pexton said. "That will give them a chance to expand their reach and capabilities with the customers."
Looking forward, Plaehn knows there are a lot of obstacles despite the "business as usual" attitude. However, most of these puzzles were solved when Control4 bought Pakedge under similar circumstances. They wanted to branch out, knew they had a lot of training, and wanted to add immediate value.
Control4's quick turn around educating 2,100 dealers to utilize Pakedge was a calculated maneuver that was "a lot of work that had to be created, managed, and facilitated."
Plaehn hopes to do something very similar with Triad while adding that immense value to dealers.
"We definitely think there is a value added to dealers," Plaehn said. "We provide them the benefit of a single relationship, the benefit of volume, business incentives, online training, and information. Then there's the end customers channel promise. Two companies dedicated to professional install market of the connected home for homeowners and their families."
"This is a clear sign that we are not equivocal or conflicted about our commitment to the opportunity or the channels," he added.