Dorma Acquires Rutherford Controls

Billion dollar plus German door hardware manufacturer Dorma is acquiring one of the most well regarded US access manufacturers, Rutherford Controls. However, the companies have historically focued on opposing sides of the market, and are stronger in different sides of the globe. Will this deal compliment the two companies, or waste individual strengths? In this note, we examine the companies involved and gauge the deal's impact to the Access Control market moving forward.

Company Profiles

Dorma is a large European door hardware manufacturer that reported ~$1.4B USD 2011 revenue. While its business is expansive, it is largely based in Europe. The company is best known in the US for its architectural hardware and highly stylized designs and finishes. Unlike other hardware manufacturers, Dorma does best in high-end, traditionally difficult openings for hardware to secure, like the 'Herculite', or frameless laminated glass door shown below:

Dorma's Americas Business

With the acquisition of RCI, Dorma not only fills a gap in its electrified hardware offerings, but provides a significant established channel presence in the US market. The company emphasizes in the announcement:

"The Americas region provides great opportunity for gaining market share, based on our ability to offer integrated premium access solutions. The RCI acquisition represents a big step forward." 

While RCI's products beef up Dorma's global electrified hardware offerings, the deal falls short of providing the crucial 'end-to-end' enterprise access control solutions currently offered by its competitors.

In recent years, Dorma has ventured into the access control market, but still has no offering that competes on the scale of Lenel, Software House, or DSX.  In the last year, the company has introduced a small/medium site hosted access control system (named Approach) built on Brivo's platform. That offering is functionally equivalent to Brivo's current products, however has been narrowed to integrate most easily with Dorma electrified hardware via pre-terminated connectors and simplified configurations, and is best suited to small site deployments.

RCI Profiled 

Rutherford Controls International is a specialty manufacturer of electrified access control hardware. While the company offers a full range of traditional electrified hardware, including maglocks and strikes, it produces several specialty products for atypical applications. For examine, the DE8310 maglock below combines a delayed egress maglock, a visual/audible annunciator, and a CCTV camera in a single unit:

RCI has traditionally sold strongly in the 'maintenance/operations' market for door hardware through integrators, installers, and building maintenance distributors. Unlike Dorma, who has traditionally competed on the 'front side' of the market through A&E Specifications and Bid Packages, RCI has focused on the 'back side' of the market typically involved after a building is already constructed.

Market Impact

With the acquisition, Dorma continues to build out a product portfolio that enables it to compete with hardware giants like Ingersoll Rand and ASSA ABLOY in the 'contract hardware' business. New construction bid packages frequently award all building hardware to a single manufacturer, so it is crucial that a hardware manufacturer offer an 'end-to-end' hardware solution. This purchase enhances Dorma's positioning in the new construction bid market.

Rutherford Controls' product mix solidifies Dorma's position in the electronic access control market. While largely consisting of rebranded controllers, the expanded company is able to leverage significant exposure in the hardware markets to pull through higher-margin electronic access control hardware.

The next logical step for Dorma may be to introduce enterprise-level electronic access control. While the company has a made an important move in competing head-to-head with giants like IR and ASSA, it still lacks the product scope to compete in the enterprise markets. Dorma's interest in developing the US market is one to watch.