Allegion Hits A 52-Week High On Proposed Trelock Buyout

Allegion plc (NYSE:ALLE) hit a new 52-week high of $68.61 on May 20. The upside was driven by the company’s announcement of plans to acquireGermany-based safety and security provider, Trelock GmbH, and related companies on May 18.

Trelock makes branded bicycle locks, lights and electronic control units which enjoy strong demand across Europe and Asia. The proposed acquisition will complement Allegion’s Kryptonite and AXA brands in the U.S. and European bicycle markets. The financial terms of the transaction were not disclosed.

Trelock will be part of Allegion’s Europe, Middle East, India and Africa (EMEIA) region. Acquisitions are an important aspect of Allegion’s growth strategy. The security products industry is highly fragmented, particularly in the developing markets, and involves the use of products that employ the latest technologies. Thus, buyouts create numerous opportunities for the acquirers to broaden their product portfolio as well as geographic footprint along with enhancing their position in strategic market segments.

Notably, Allegion completed the acquisition of South Korea-based producer of innovative electronic door locks – Milre Systek Co., Ltd. – last August. The company also purchased Europe-based security providers – AXA Stenman Holding and SimonsVoss Technologies GmbH – in Sep 2015. These acquisitions should strengthen the company’s presence in Europe,

The acquisition of Brio, in May 2015, added sliding and holding door hardware products to Allegion’s portfolio, thereby expanding it globally. In Apr 2015, Allegion acquired Zero International Inc., and with this takeover, the company increased its emphasis on green building applications that support heating and cooling efficiency.

Stocks to Consider

Allegion has a Zacks Rank #3 (Hold). Some better-ranked stocks in the protection and safety industry are Ascent Capital Group, Inc. (NASDAQ:ASCMA) , Alarm.Com Holdings, Inc. (NASDAQ:ALRM) and SuperCom Ltd. (NASDAQ:SPCB) . All these stocks hold a Zacks Rank #2 (Buy).