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Allegion (ALLE) Buys Yonomi, Strengthens Product Offerings

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Allegion plc (ALLE - Free Report) , on Jan 6, announced that it has completed the acquisition of technology company — Yonomi. However, the financial terms of the transaction were kept under wraps.

Yonomi, which specializes in IoT cloud platforms, is well known for its smart-home technology that facilitates in discovering and coordinating devices. The company’s patented technology solutions are used by a strong customer base, spanning across more than 150 countries.

Notably, Allegion’s shares gained 5% in the past couple of days to eventually close the trading session at $120.40.

Acquisition Rationale

Yonomi’s expertise in IoT solutions, coupled with its strong innovation capabilities, will enable Allegion to boost its smart-home solutions through its major brands like Schlage. It’s worth mentioning that Allegion has a long-standing partnership with Yonomi, where the company leverages the latter’s Thin Cloud infrastructure and cloud computing expertise to support its smart locks. As a matter fact, this buyout is likely to provide Allegion with added capacity and capital to further develop its technologies and platforms.

Zacks Rank, Price Performance and Estimate Revisions

Allegion, with approximately $11.1 billion market capitalization, currently carries a Zacks Rank #2 (Buy). The company will benefit from strength in the electronic products business, along with product development and a large customer base in the long term. Also, improvement in demand across home builder markets and point-of-sales in the e-commerce channels are likely to be tailwinds.

In the past three months, the company’s share price has increased 16.1% compared with the industry’s growth of 13.2%.

The Zacks Consensus Estimate for its earnings is pegged at $4.80 for 2020, up 0.2% from the 30-day-ago figure. The consensus estimate for 2021 earnings is pegged at $4.62, up 0.4% over the same time frame.

Other Key Picks

Some other top-ranked stocks from the same space are Fortune Brands Home & Security, Inc. (FBHS - Free Report) , Brady Corporation (BRC - Free Report) and Ituran Location and Control Ltd. (ITRN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fortune Brands delivered a trailing four-quarter positive earnings surprise of 23.02%, on average.

Brady delivered a trailing four-quarter positive earnings surprise of 2.95%, on average.

Ituran Location delivered a trailing four-quarter positive earnings surprise of 36.25%, on average.

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