Gentex acquires Johnson Controls' HomeLink for $700M
Zeeland-based Gentex Corp. today announced its signing of an agreement to buy Johnson Controls’ HomeLink business.
HomeLink, a vehicle-based control system that enables drivers to remotely activate garage door openers, entry door locks, home lighting, security systems, entry gates, and other radio frequency convenience products, has been integrated into Gentex’ automatic-dimming rearview mirrors for more than 10 years.
It is compatible with a wide variety of home safety and convenience products and is currently offered in all automotive brands.
HomeLink is compatible with more than 99 percent of garage door opening systems and is sold in North America, Europe, Africa, Asia/Pacific and the Middle East.
“HomeLink is a strategic and welcome addition to our portfolio of automotive products,” said Fred Bauer, Gentex’s board chairman and CEO. “Our two businesses share similar cultures and traits, both being people-oriented, innovative, leading and technologically driven.”
Johnson Controls, which is headquartered in Milwaukee and is one of the world’s largest auto industry suppliers, has agreed to sell to Gentex all of the HomeLink assets, intellectual property and testing facilities for $700 million.
The transaction is subject to customary closing conditions, including certain regulatory approval, and is targeted to close on or about Sept. 30.
“During the integration, which is expected to occur over the next 12 to 18 months, our customers will continue to receive the same great quality that they have grown accustomed to from Gentex and Johnson Controls,” continued Bauer.
Once HomeLink is fully integrated, Gentex expects that annual revenue will increase in the range of $125 million to $150 million per year.
Gentex (NASDAQ: GNTX) also estimates that its gross profit margin will increase from 1 percent to 1.5 percent on a consolidated basis and that once the integration is completed, operating expenses will be in the range of the company’s historical operating expenses as a percent of sales.
Based on these estimates, Gentex expects the addition of HomeLink to increase profitability and earnings per share and be a growth driver for the business overall.