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Digi International (DGII) Boosts IoT Portfolio With Ctek Buyout

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Digi International Inc. DGII acquired an industrial solutions provider, Ctek, Inc., under undisclosed financial terms. Markedly, the buyout will augment Digi International’s portfolio of edge automation solutions and support customers with enhanced infrastructure, while extending its footprint in a rapidly expanding market.

As part of the transaction, Ctek’s remote monitoring and industrial control solutions have been incorporated in Digi International’s suite of IoT solutions. Consequently, the unique combination, involving avant-garde hardware and software, will enable Digi International to create superior enterprise and industrial connectivity solutions. Despite such a significant victory, the Hopkins, MN-based company’s shares declined 1% to close at $19.82 on Jul 6.

With an industry exposure of nearly 20 years, Ctek is an expert in providing ruggedized products for agriculture, lighting, waste-water and asset management. Its products have been designed to seamlessly ensure network connectivity on the back of the SkyWorx solution. With a robust application suite, its SkyCloud platform perfectly enhances Digi’s Connect Sensor+ with an intuitive visual interface.

Apart from expanding Digi International’s existing client base, the acquisition will now enable it to offer both battery and hardwired options for the control and monitoring of critical infrastructure. It is worth mentioning that the addition of Ctek’s user-focused platform accompanied by a prime customer base is likely to bolster its trailblazing portfolio of industrial IoT solutions.

Given the impressive record of Digi International’s innovations in the communication equipment industry, the latest buyout is likely to not only elevate its position as a software-first innovator in the global market but also propel its business roadmap in the long run. Driven by such a distinct strategy, the move is expected to be a game-changer for supporting intelligent edge solutions in the near future across a diverse set of customers.

Digi International currently has a Zacks Rank #3 (Hold). Its shares have gained 82.8% compared with 15.9% growth of the industry in the past year.

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Some better-ranked stocks in the broader industry are United States Cellular Corporation USM, Ooma, Inc. OOMA and SeaChange International, Inc. SEAC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United States Cellular delivered a trailing four-quarter earnings surprise of 123.9%, on average.

Ooma delivered a trailing four-quarter earnings surprise of 65.5%, on average.

SeaChange International delivered a trailing four-quarter earnings surprise of 12.2%, on average.

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