Nortek to Purchase 2GIG for $135M
“2GIG offers products such as home thermostats, alarms and wireless carbon monoxide detectors that can be leveraged by these Nortek brands to grow their business with existing customer accounts,” Sean Burke, group president of Nortek’s Technology Solutions, says. “At the same time, these brands offer products that can expand and enhance the 2GIG home automation platform, potentially opening doors to new market opportunities.”
Nortek will fold 2GIG into its subsidiary Linear LLC, a provider of home security, personal emergency response systems (PERS) and commercial access control systems. Started in 2007 by Honeywell Security veterans Lance Dean and Simon Scott, 2GIG is best known for its Go!Control self-contained security and home management system, which was developed with the Linear’s support.
Under the terms of the agreement, Nortek will pay $135 million for all of the outstanding common stock of 2GIG on a cash- and debt-free basis. Financed with a combination of cash on hand and borrowings under Nortek’s asset-based credit facility, the firm plans to close the deal during the first half of 2013.
The announcement comes five months after Blackstone Group acquired 2GIG, along with Vivint, the home automation provider’s largest customer, for $2 billion. Part of the latest transaction includes a five-year supply agreement with Vivint.
“Acquiring 2GIG will position our Technology Solutions business as one of the world’s top-tier hardware developers and manufacturers in the rapidly growing residential security and home automation markets,” Nortek Chief Executive Officer Michael Clarke says. “The transaction allows us to better provide long-term support to Vivint and other 2GIG customers. We look forward to welcoming 2GIG’s talented employee team into the Nortek family of companies.”
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