In a move that shakes up the home security and automation market, Comcast and Alarm.com said they have struck agreements to buy different pieces of Icontrol.
Comcast is in line to buy the Austin division that built the platform powering the MSO’s Xfinity Home service, and Alarm.com set to acquire Icontrol’s Silicon Valley and Ottawa business units, which together include a platform used today by ADT and Icontrol’s retail-focused, do-it-yourself Piper product line. Alarm.com is paying $140 million to acquire its portion of the Icontrol assets. Comcast and Icontrol did not reveal the financial terms of their agreement.
The announcement comes about two weeks after Stacey Higginbotham reported that Icontrol was in talks to sell its assets to Comcast and Alarm.com.
Comcast, which continues to expand on its own Works with Xfinity Home initiative for third-party connected-home products such as the Nest Learning Thermostat, has been using Icontrol’s platform since it launched its home security and automation service in 2010.
“The main business we are acquiring is Icontrol’s 'Converge' software platform,” Dan Herscovici, SVP and GM of Xfinity Home, explained in this blog post about the deal. “That platform powers the Xfinity Home touch-screen panel and back-end servers, allowing them to communicate with and manage security sensors in the home, as well as supporting home-automation devices like cameras and thermostats."
In addition to Comcast, Icontrol’s platform is also being used to power similar services from Cox Communications, Rogers Communications, and Bell Aliant. Time Warner Cable and Bright House Networks, recently acquired by Charter Communications, have also relied on Icontrol for their respective smart home services. Charter confirmed last week that it is reducing its focus on sales of those products as it assesses that line of business, but that it will continue to support existing customers.
“We look forward to continuing to serve customers using the Converge software platform and to growing Icontrol’s wholesale business by accelerating the development of new services and features,” Herscovici noted, adding that Comcast will continue to invest it Icontrol’s technology for Xfinity Home subs as well as “enterprise-level” Converge customers.
He added that Icontrol employees in Austin who are joining Comcast will underpin a new Comcast “engineering center of excellence” there, and work closely with Comcast’s engineers in Philadelphia and Silicon Valley.
Meanwhile, Alarm.com, which counts Suddenlink (now part of Altice) among its customers, will snap up Icontrol’s Connect and Piper business units for $140 million, and expects to close it before the end of 2016. Connect provides security and home automation services for provides that include market-leader ADT, which has about 1.6 million subscribers. Piper, the Ottawa-based unit, makes and sells video and home automation hubs that was spawned by Icontrol’s 2014 acquisition of Blacksumac.
"This acquisition will enhance our research and development scale so that we can continue to deliver long-term value to our partners through innovative technology," Steve Trundle, president and CEO of Alarm.com, said in a statement. "We look forward to welcoming the Icontrol team and to building upon the solid relationships within their customer base."
Raymond James acted as the financial advisor to Alarm.com on the deal.