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Based in Salt Lake City, UT, Control4 Corporation (NASDAQ:CTRL) scheduled a $64 million IPO with a market capitalization of $352 million at a price point mid-range of $16, for Friday, August 2, 2013.

Six other IPOs were scheduled for the week of July 29. The full IPO calendar can be found at IPOpremium.

  • S-1 filed July 22, 2013
  • Manager, Joint Managers: BofA Merrill; Raymond James
  • Co-Managers: Canaccord Genuity; Cowen; Needham

Business

CTRL provides home automation through proprietary software and associated devices.

Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q2 '13 est

Cap ((mm))

Sls

Erngs pre-tax

BkVlue

TanBV

in IPO

Control4 Corporation

$352

2.7

60.7

4.4

4.4

18%

CTRL has an internal growth rate of 20% in top line revenue per year. CTRL estimates its pre-tax operating earnings will be $1.45 million for Q2 '13.

Conclusion

CTRL is definitely worth watching, and the rating is neutral to positive.

To put the above conclusions and observations in context, the following is reorganized, edited, and summarized from the full S-1.

Business

CTRL is a leading provider of automation and control solutions for the connected home. It unlocks the potential of connected devices, making entertainment systems easier to use, homes more comfortable and energy efficient, and families more secure.

CTRL provides consumers with the ability to integrate music, video, lighting, temperature, security, communications and other functionalities into a unified home automation solution.

More than 75% of CTRL's consumers have integrated two or more of these functionalities with CTRL's solution.

At the center of CTRL's solution is an advanced software platform, which provides an interface with a wide variety of connected devices that are developed by CTRL and by third parties.

Through March 31, 2013, CTRL estimates that it has automated more than 120,000 homes representing cumulative sales of more than 275,000 controller appliances, the brain of the connected home.

Distribution

CTRL sells and delivers solutions through an extensive worldwide dealer and distributor network and have solutions installed in 81 countries. The top 100 dealers represented 24% of total revenue in 2012.

Seasonality

Revenue is generally highest in the fourth quarter due to consumers' desires to complete their home installations prior to the Thanksgiving and Christmas holidays. CTRL generally sees decreased sales in the first quarter due to the number of installations that were completed in the fourth quarter and the resulting decline in dealer activity in the first quarter.

Competition

• Providers of point products that address a narrow set of control and automation capabilities, including Logitech, Lutron, Nest, Roku, Sonos and Universal Remote Control; and

• Providers of managed home automation and security services, including ADT, Comcast, Verizon and Vivint (which in turn may utilize third-party software from companies including Alarm.com and iControl).

A number of large technology companies such as Apple, Google, Microsoft and Samsung offer home control capabilities among some of their own products, applications and services and are engaged in ongoing development efforts to address the broader home automation market

Intellectual property

As of March 31, 2013, CTRL owned 34 issued United States patents (16 of which are design patents) that are scheduled to expire between 2025 and 2030, with respect to utility patents, and between 2020 and 2022, with respect to design patents.

CTRL continues to file patent applications in multiple jurisdictions and as of March 31, 2013, had two patent applications allowed, 13 patent applications published and 11 patent applications pending in the United States. CTRL also had five issued patents and 14 pending patent applications under foreign jurisdictions and treaties such as Canada, Australia, New Zealand, the United Kingdom and the European Patent Convention.

5% stockholders pre-IPO

Entities affiliated with Foundation Capital, 28.5%
Entities affiliated with Thomas Weisel Venture Partners, 16.4%
Entities affiliated with Signal Peak Ventures, 12.7%
Frazier Technology Ventures II, L.P., 12.3%
Cisco Systems, Inc., 10.8%

Employees

As of March 31, 2013, CTRL had 333 full-time employees

Use of proceeds

CTRL expects to net $57 million from its IPO. Proceeds are allocated to working capital and general corporate purposes, including a $2.25 million litigation settlement agreement.

Disclaimer: This CTRL IPO report is based on a reading and analysis of CTRL's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Control4 Corporation