Assa Acquires $40 Million Chinese Manufacturer

By Brian Rhodes, Published Dec 17, 2014, 12:00am EST

In this note, we examine the impact of Assa'a purchase of a $40 million Chinese access control manufacturer.

Assa Acquires Digi Electronic Lock

Lock giant Assa Abloy announced it is buying a chinese hotel lock system manufacturer, Digi Electronic Lock, Ltd.  While terms of the deal have not been disclosed, Digi Electronic Lock is not a insignificant part of the China hospitality lock market, reportedly turning more than $40 million USD (SEK 300 M) in sales in 2014.

Company Profile

Digi Electronic Lock is most recognized for it's 'Keylock' line of standalone RFID and fingerprint door locks. These products are designed to be non-networked and battery powered, and routinely updated by the credential holder or a programming card. The short 'company profile' video below shows that Digi is not just a sourcing company, but is the manufacturer of these locksets, with fabrication, design, and support in-house:

Like many Chinese companies, Digi Electronic's locks are on the cheaper side. For example, the company's eBay store shows most locksets can be purchased for less than $200 USD, a fraction of the cost that US domestic and European products run.

Market Impact

When it comes to the mainstream access market, we expect this purchase to have little impact. Even within the hotel lock niche, Assa's existing portfolio of companies includes a full slate of Hospitality market specialties, including VingCard Elsafe that owns significant market share outside of Asia.

We expect the purchase of Digi Electronic Lock essentially buys Chinese marketshare from a competing line, with a likely incorporation of DEL product into an existing hospitality brand rather than continued operations as a separate unit under new ownership.

For the larger physical access control market, this purchase does not likely change usual business or product offerings.

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