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Why Alarm.com Holdings, Inc. Stock Jumped 12.8%

What: An announcement on Thursday morning noting that home technology company Alarm.com (NASDAQ: ALRM) has agreed to acquire two business units from Icontrol Networks in conjunction with Comcast 's(NASDAQ: CMCSA) acquisition of Icontrol's Converge business units sent Alarm.com shares soaring as much as 12.8% today. Alarm.com stock is up about 11.7% at the time of this writing.

Image source: Alarm.com.

So what: Alarm.com is acquiring two Icontrol Network business units called Connect and Piper. California-based Connect "provides an interactive security and home automation platform that powers several service providers' solutions including ADT Pulse with over 1.6 million subscribers," reads Alarm.com's press release about the acquisition. Ottawa, Candada-based Piper "designs, produces and sells a Wi-Fi-enabled video and home automation hub."

Alarm.com will pay $140 million in the transaction, planning to fund it with a combination of cash and debt.

Based on Thursday's market response, Alarm.com investors appear enthusiastic about the potential synergies and the new customer relationships to be gained.

Now what: While the acquisition is expected to close by the end of the year, it's "subject to customary closing conditions, regulatory approvals as well as the closing of Comcast's acquisition of Icontrol's Converge business unit," Alarm.com said.

The new business units will better position Alarm.com to offer products in the fast-growing "internet of things" category, as well as complement Alarm.com's existing home security platform.

Further, the acquisition will give Alarm.com greater scale in research and development, president and CEO of Alarm.com Steve Trundle explained in the press release.

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Daniel Sparks has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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