Nortek Buy Fills US Expansion Goal for Italian Automation Firm: CEO
Becoming a major player in the U.S. market has always been an objective in Italy-based Nice’s long-term plans, emailed Nortek Control CEO Edoardo Malfe after Nice’s purchase of Nortek last week for $285 million (see 2110050066). The purchase doubled Nice’s R&D capabilities, now at 16 centers globally, Malfe said, as the company looks to “develop integrated solutions for our customers that simplify their everyday movements.” Malfe was Nice's vice president-global operations before the purchase.
Nice is the second European company to buy U.S. brands in the quarter, after Assa Abloy’s buy of Spectrum Brands’ smart lock brands including Kwikset and Baldwin. Malfe said the acquisitions aren't a reflection of European or U.S. markets being mature: “New solutions, technology innovation, and pollination across adjacent industries are reinforcing a positive trend, with increasing demand for smart home, security, and home automation products across both markets.”
Nice manages 14 factories worldwide that are connected to technology and competence centers, including two in the U.S. and one in Canada, giving it the ability to respond quickly to customer needs, Malfe said. Its industrial footprint, “leaving some room for potential consolidation,” also leverages manufacturing service providers in Italy, Mexico, and Asia, which Malfe credited for enabling Nice to meet customer demand in the last 18 months: “In these troubled times for the global supply chain, some redundancy and fragmentation is actually an asset. This is a core competency that we will not give up easily.”
“Over time,” U.S. Nortek dealers will have access to the Nice line, Malfe said. Nortek Control brands already are "an impressive product offering,” he said. The company will integrate portfolios leveraging Nice products, services and solutions when it’s appropriate, “while accelerating innovation for both.” Nice’s commercial network will allow the Nortek brands to expand to international markets, he said. The Nice portfolio spans do-it-yourself, professional and custom channels and includes point products and integrated ecosystems for residential, commercial and industrial buildings in over 100 countries.
Malfe didn’t comment directly on potential job losses due to the acquisition, saying, “We are here to develop, not harvest short-term efficiencies.” On whether it plans to consolidate brands, he said there will be “no change.” Nortek Control distributors, dealers and integrators will continue to be supported by their contacts in commercial, customer service and technical support departments.
Rebranding of Nortek lines -- 3Gig, Elan, Linear, Mighty Mule, Proficient, SpeakerCraft, Gefen, Xantech, Panamax, Furman, Numera and IntelliVision -- isn’t in the picture for now, Malfe said: “The value of Nortek Control commercial brands is an asset that Nice will protect, develop and promote. ... When the time is right, we will assess branding opportunities.”
Responding to our question on additional acquisitions, Malfe said the industry “is still very fragmented.” The $285 million Nortek buy is its largest investment to date and makes Nice “the most robust single-source provider of complete, integrated product ecosystem solutions for homes and buildings.” There “might still be opportunities to further reinforce our ability to meet and exceed our customer and partner requirements,” he said.
On Nice’s vision for the smart home, Malfe said the word “smart” suggests adaptive, automated learning, but “the more technology can do, the more the human factor becomes central.” That’s true for customers who want to retain control over their systems and those who want customized systems. The human factor also includes integrators who install smart home systems. “The required talent pool is expanding, competences to integrate and innovate are more and more diverse, and boundaries across sectors have melted,” Malfe said.“Competing for top talent and providing the ability to let them create while keeping the end user at the center of every solution will be the competitive advantage in the long run," he said.