Google's Deal to Purchase Nest Labs Sends a Surge Through the Home Automation Industry
Google (NASDAQ: GOOG) announced Monday that it will purchase privately-owned Nest Labs for $3.2 billion - an item which could be a signal toward the company's further diversification of its operations. According to the Wall Street Journal, this deal marks one of Google's largest deals, second only to the 2012 purchase of Motorola.
Google shares traded up more than 2 percent on Tuesday's session, closing at $1,149.40.
Looking to take advantage of possible industry-wide gains, Investors flooded the home automation industry, boosting interest in companies similar to Nest labs. The most notable of which are Echelon (NASDAQ: ELON) and Control4 (NASDAQ: CTRL).
The industrial “internet of things” company Echelon spiked up nearly 40 percent and closed over the $3 level at $3.08.
Control4 was up as much as 55 percent Tuesday and closed up nearly 38 percent to $25.49.
Responding to the news Tuesday afternoon, Raymond James' Tavis McCourt said he is optimistic about Control4's future. In comparing Control4 to Nest Labs, McCourt notes, “Control4's home automation software and hardware is more interoperable than Nest's and has benefit of 10+ years of development/IP accumulation.”
McCourt currently rates shares of Control4 with an Outperform rating and $24 price target.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.