Samsung Electronics Co. Ltd’s share price down, to acquire start­up SmartTings to set foot at smart homes

Samsung Electronics Co. Ltd is to acquire the start­up SmartThings, which produces mobile applications that remotely control home devices. This step is considered to be provoked by the companys desire to set foot at home automation as a worthy rival of other technology giants such
as Apple Inc. and Google Inc.

The Chief Executive Officer of Samsung Electronics Co. Ltd – Mr. Alex Hawkinson revealed that Samsung and SmartThings were having negotiations for about two months. None of the terms of the deal were disclosed, including the acquisition price. Still, an online
publication of TechCrunch in July 2014 reported that the price amounts to 200 million dollars.

Samsung Electronics, which is based in South Korea, explained that SmartThings would continue to operate as an independent entity, but will become a structural part of its Open Innovation Centre.

SmartThings has been based in Washington DC, but will move its headquarters to California, where some of Samsungs operations are located. The start­up, which does not produce any devices itself but provides software that can be used by other companies when making devices that “communicate” with each other, managed to raise 15.5 million dollars in venture funding. The company received 1.2 million dollars from a Kickstarter campaign in September 2012.

The acquisition of SmartThings is considered a major step of Samsung in the direction of building and consolidating a presence in the so­called Internet of things. The head of its Open Innovation Centre – Mr. David Eun shared that the company plans to make more investments, acquisitions and partnerships in this direction.

As reported by the Financial Times, Mr. Eun commented: “The connected home has and will continue to be a big priority for us. What has been lacking is a software platform that allows developers to create great experiences by connecting different devices from different companies, which is what most people have in their home.”

On the other hand, the collaboration with Samsung will provide Smarthings with the opportunity to back leading smartphone vendors, devices, and applications, as the start­up itself said in a blog post.

Samsung Electronics Co. Ltd was 0.24% down to close at 1261000 South Korean won per share yesterday, marking a one­year change of ­3.00%. According to the information published on the Financial Times, the 41 analysts offering 12­month price targets for Samsung Electronics Co.

have a median target of 1,650,000, with a high estimate of 2,200,000 and a low estimate of 1,095,000. The median estimate represents a 30.54% increase from the last price of 1,264,000.