Universal Electronics Inc. (UEI), (NASDAQ:UEIC), the worldwide leader in universal control and sensing technologies for the smart home, has entered into an agreement to acquire certain assets of U.S.-based Residential Control Systems, Inc. (known as “RCS Technology”) – a leading designer and manufacturer of energy management and control products for the Residential, Commercial, and Hospitality markets.
Through this acquisition, UEI further solidifies its footprint in the rapidly growing IoT space by expanding its portfolio of home sensing, monitoring and control solutions to include programmable communicating thermostats (PCTs), advanced HVAC controls, energy monitoring and control devices, gateways, in-home displays and user interfaces.
“RCS represents another important step toward our goal to be the leader in control and sensing technologies for the smart home,” says Paul Arling, UEI’s Chairman and CEO. “This acquisition builds on our existing business with original equipment manufacturers in HVAC, giving us an expanded capability in delivering traditional and wireless thermostats, room air controllers and wireless remotes to customers such as Daikin, Fujitsu and Panasonic. The addition of RCS brings new smart thermostat, sensing and monitoring products to our international market through our global sales, manufacturing, and distribution channels.”
The smart thermostat market is projected to have accelerated growth over the next five years, driven by several factors: advancements in communication technologies; consumer interest in home automation and monitoring; a push for energy conservation; and the growth of utility and government-sponsored programmes. According to data from Navigant Research, the global market for smart and communicating thermostats is expected to double in size, from $1.1 billion USD in 2016 to $2.2 billion in 2020, with the largest growth forecasted in North America.
RCS is one of the leading suppliers of smart and communicating thermostats to original equipment manufacturers (OEM). RCS has delivered innovative thermostat products to some of the largest HVAC manufacturers in North America, as well as the leading brands in the security and automation industry, such as ADT.
“Our growth has been driven largely by a focus on quick development for accelerated time to market, using local, responsive engineering design and production teams, as well as a broad product portfolio including Z-Wave®, ZigBee® and Wi-Fi® technologies,” states Michael Kuhlmann, RCS President and CEO. “UEI’s leadership position in its current markets, as well as its global development and manufacturing footprint, will give us the leverage we need to build market share in a growing and exciting segment of the IoT space.”
The purchase price for the acquisition of RCS assets will be approximately $9 million USD in cash plus incentive-based cash consideration to be paid over the next five years. RCS’ acquired assets include product lines, inventory, intellectual property, engineering and development resources, sales and distribution relationships, and other assets used in its communication and smart thermostat business.
UEI intends to operate the acquired business as a wholly-owned subsidiary and market the energy monitoring, thermostat, sensor products and services under RCS brands and its trademarks, building upon RCS’ many years of experience, expertise and innovation in the industry.