Johnson Controls (NYSE: JCI) has acquired Foghorn to strengthen its leadership position in smart and autonomous buildings. The financial terms of the deal have been kept under wraps.
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Headquartered in Ireland, Johnson Controls International is an American Irish-domiciled global conglomerate that produces fire, HVAC, and security equipment for smart, healthy, and sustainable buildings.
Notably, shares of the company with a current market capitalization of $56 billion have risen 54% over the past year.
Benefits of the Deal
FogHorn is the leading developer of Edge AI software for industrial and commercial Internet of Things (IoT) solutions.
The addition of Foghorn’s industry-leading Edge AI platform with Johnson Controls’ OpenBlue capabilities will accelerate Johnson Controls’ innovation and vision, as well as its leadership position for smart autonomous buildings.
Furthermore, Foghorn’s Edge AI platform will add intelligence to the source of data inside the building. This will lead to secure, real-time machine learning-driven solutions, thereby solving the challenges of decarbonization, sustainability, energy efficiency, indoor air quality, etc.
FogHorn’s team will become a part of the OpenBlue Solutions organization, with its headquarters in California that will function as an ‘AI Hub’ for Johnson Controls.
Management Comments
Johnson Controls CTO, Vijay Sankaran, commented, “Value is increasingly being created by applying intelligence at the edge-device level to create real-time, secure, actionable insights,”
He further added, “By pervasively integrating Foghorn’s world-class Edge AI throughout our OpenBlue solution portfolio, we are accelerating the pace towards our vision of smart, autonomous buildings that continuously learn, adapt and automatically respond to the needs of the environment and people.”
Analyst Recommendations
On January 10, Deutsche Bank analyst Nicole DeBlase decreased the price target on Johnson Controls to $84 (5.6% upside potential) from $85 and reiterated a Hold rating.
Overall, the stock has a Moderate Buy consensus rating based on 8 Buys and 3 Holds. The average Johnson Controls stock forecast of $86 implies 8.1% upside potential from current levels.
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