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Allegion to Reinforce Technology Platform With ISONAS Buyout

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Allegion plc (ALLE - Free Report) has settled to acquire ISONAS Security Systems Inc. (ISONAS) for an undisclosed amount. The deal is currently subject to customary closing conditions and will likely be concluded by early third-quarter 2018. Acquisition of this Boulder, CO-based company will reinforce Allegion’s existing technology portfolio, as well as align well with its channel initiatives.

ISONAS owns premium edge-computing technology that produces non-imitable access control solutions for the non-residential end-markets. Additionally, ISONAS intelligent devices, such as integrated reader-controller, use power other than ethernet. This feature simplifies the installation process of the controllers and makes them cost effective at times of customer infrastructure utilization.

ISONAS has a wide customer base, and a strong network of certified committed distributors and integrators. The company generated $6 million revenues in 2017.

Allegion’s presence in the global electronics market as well as its existing channel relationships will likely improve with the ISONAS buyout. Post acquisition, ISONAS will operate as one of Allegion’s Americas businesses.

Allegion currently carries a Zacks Rank #4 (Sell). Over the past month, shares of the company have lost 2.6%, wider than 1.5% loss recorded by the industry.

In the past 60 days, the company’s Zacks Consensus Estimate in 2018 remained unchanged, but moved 0.2% south for 2019. Turbulence in the supply chain has been deferring projects in the construction industry, in turn, dampening revenues of companies like Allegion. Moreover, workforce shortage remains another key cause of concern.

Stocks to Consider

Some better-ranked stocks in same space are listed below:

ForeScout Technologies, Inc. (FSCT - Free Report) carries a Zacks Rank #2 (Buy). The company pulled off an average positive earnings surprise of 27.20% over the last four quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Johnson Controls International plc (JCI - Free Report) also carries a Zacks Rank of 2. The company delivered an average positive earnings surprise of 1.95%, in the preceding four quarters.

Digimarc Corporation (DMRC - Free Report) , another Zacks #2 Ranked company, came up with an average positive earnings surprise of 13.26%, during the same time frame.

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