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Allegion Partners With European IoT Mobility Platform Again

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In sync with its strategy to invest in new technologies, Allegion plc (ALLE - Free Report) made an equity investment in European Internet of Things (IoT) mobility platform developer, Conneqtech. This is the second time Allegion is partnering with Conneqtech. Earlier, the companies collaborated to develop AXA Connect, which enables cyclist to stay in contact with their bike via smartphone.

Moreover, this is also Allegion’s second European IoT investment in 2018. In February 2018, the company made a minority investment in European smart-home innovator, Nuki, specializing in providing smart lock solutions.

Allegion consistently focuses on investing in product development to keep up with the changing market sentiment toward electric security products and solutions. In fact, sales of electronic security products are growing at a steady rate compared wih traditional mechanical counterparts.

Conneqtech specializes in providing IoT solutions for bicycles and healthcare applications. Investing in the IoT platform is expected to substantially boost demand for Allegion’s products and revenues. The IoT is a growing market, connecting household and industrial devices. Everyday products and machines can now be embedded with sensor technology to process data or interact with other electronic devices.

Apart from this, Allegion has made a slew of acquisitions since the beginning of 2018 that has broadened its product portfolio as well as geographic footprint. In the first quarter of 2018, the company’s buyouts contributed 4.7% to the overall growth. Moreover, in 2017, acquisitions contributed 1.4% to revenue growth of 7.6%.

In March 2018, Allegion acquired the manufacturer of high-performance interior and healthcare door systems — Aurora Systems. In February, the company acquired one of Middle East’s largest manufacturers of commercial steel as well as wooden doors and frames, Qatar Metal Industries. With the addition of Qatar Metal, the company is able to expand code-compliant products to include doors in the Middle Eastern market. In January, Allegion acquired the leading North American manufacturer of advanced fire-rated entrance and wall systems, Technical Glass Products or TGP, which is expected to enhance the company’s core product lines.

Notably, Allegion’s inorganic drive and innovative products has boosted its performance as is evident from its price movement. The company’s shares have outperformed its industry so far this year. This Zacks Rank #3 (Hold) company is expected to sustain the momentum on the back of acquisitions and increased focus on innovation.



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