ASX-listed smart home technology provider, Quantify Technology, has completed an exciting merger with like-minded GSM Innovations while successfully raising $4 million. Adelaide-based GSM-I, a subsidiary of unlisted electrical specialists Gerard Private Holdings, manufactures the segment-leading Zimi integrated home technology products. The deal also sees Gerard Private take a 40 per cent major shareholder position in Quantify.
ASX-listed smart home technology provider, Quantify Technology, has completed an exciting merger with like-minded GSM Innovations, or “GSM-I” while successfully raising $4 million. Adelaide-based GSM-I, a subsidiary of unlisted electrical specialist Gerard Private Holdings, manufactures the segment-leading Zimi integrated home technology products.
The merger catapults Quantify to the top of Australia's smart home technology market via Zimi’s 5,000 active devices in 2,000 homes across the nation.
As a result of the deal Gerard Private becomes a major shareholder in Quantify, holding 40 per cent of its stock. ASX-listed and Zimi product distributor Beacon Lighting Group and veteran stockpicker John Murray’s company, Perennial Value Management, also invested in the capital raise.
The Gerard family has a 100-year pedigree in electrical service and manufacturing in Australia, including establishing the Clipsal brand in 1920.
Quantify’s board will be boosted by key personnel, including Gerard Private Managing Director, Simon Gerard and Zimi founder and General Manager, Jordan Tentori. Mr Tentori will also take up the role of Chief Technology Officer at Quantify.
Quantify Technology Chief Executive Officer, Brett Savill, said the capital raise would help accelerate growth across all Quantify’s Internet of Things home technology channels.
“We are excited to have the funding and partners in place to help the devices reach their full potential,” Mr Savill said. “I am also delighted to welcome Simon Gerard and Jordan Tentori to the board, along with the new employees. The acquisition of GSM-I is a real case of one plus one making three.”
Zimi products are currently distributed through three main channels – Beacon Lighting, Trader and Steel-Line. Trader, a subsidiary of Gerard Private supporting the wholesale electrical trades market, recently ordered 10,000 Zimi devices to be delivered in the first quarter of 2021. Steel-Line, which has been manufacturing garage doors for four decades, now has its own branded line of Zimi Powermesh Garage Door Controllers. The controllers integrate Flight Path Technology giving the consumer ability to control their garage door from anywhere in the world.
With Zimi Powermesh homeowners can create a fully integrated Bluetooth enabled network to control lights, appliances, fans, switches and garage doors. The ‘touch, tap or talk’ devices can be linked to the voice activated Google Assistant.
Products connect using Bluetooth mesh technology which means they ‘talk’ to each other. The advantage of Bluetooth is that reception improves as more devices are paired. Zimi networks can be set up on a smartphone to enable remote activation and control. Powermesh can also monitor energy use and costs across the network.
Quantify says the merger will significantly expand its addressable market with more than 25 million device opportunities in Australia alone. It is also expected the merger will reduce operating and manufacturing costs as Quantify devices are migrated to Zimi manufacturing facilities. The merger may also lead to an increase in cross-selling opportunities with multiple partners to accelerate adoption.
According to market data quoted in Quantify’s November 2020 investor presentation, Australia’s smart home technology market is worth $1.8 billion. This market is predicted to double by 2025.
The growth in new home construction on the back of big national COVID-19 stimulus packages for internet savvy, climate-conscious first homeowners is likely to stimulate market interest, as smart home packages become standard for new home designs.
According to the Australian Bureau of Statistics, housing approvals in October reached their highest levels since 2000 with the surge in dwellings driven by NSW and Western Australia.
Quantify’s merger seems well-timed to take advantage of a growing market as it looks forward to a step-change in product sales across its significantly boosted distribution network.
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