Universal Electronics Inc. (Nasdaq: UEIC), a 30-year-old giant in the remote-controls business, is acquiring RCS Technology, a pioneer and leader in smart thermostats, energy management and home automation.

RCS (formerly Residential Control Systems) may not be well-known among smart-home enthusiasts, but the company was making smart stats and energy management systems long before they were cool. Today, its products are OEMd to a wide range of providers in the security, home automation, utility and building-controls markets.

RCS is a lot like UEI, which has a thriving OEM business for remote controls, serving most of the top cable/satellite providers and TV makers.

Like UEI, RCS lets “their tech shine through other people’s brands,” says Ramzi Ammari, SVP, global product planning and strategy for UEI. “We have a lot of products in the home, but you don’t see our name on them.”

The purchase price for the acquisition of RCS assets will be approximately $9 million in cash plus incentive-based cash consideration to be paid over the next five years. UEI had revenues of more than $651 million in 2016.

UEI’s Home-Technology Roadmap

UEI makes perfect sense as a buyer. The company started life three decades ago as an OEM provider of remote controls. Chances are your TV, DVD, satellite, cable or other handheld remote came from them. The company also sells products direct to consumer via the One For All brand.

About a decade ago, UEI sold a complete home-automation solution called Nevo, featuring a touchscreen remote control and hub that integrated with third-party smart devices via a number of protocols.

It was one of the first home controllers to integrate with Sonos in 2010, at which time it released a software developer kit (SDK) for integration. Only professional integrators had access to the advanced control system, which was abandoned in 2011.

Over the past couple of years, though, UEI has attacked the smart-home market more aggressively.

In 2015, UEI acquired Ecolink, a start-up provider of Z-Wave devices and security sensors for professional alarm systems. UEI plans to package a complete smart-home solution for service providers, especially the regional telecom and cable companies it already serves.

RCS Technology founder

Michael Kuhlmann (left) with

VP Biz Dev Gene Goodell

For example, Comcast is a huge customer for UEI remote controls and now purchases some Ecolink products for its Xfinity Home automation system. Why not thermostats, too?

At CES 2017, UEI showed a kit created especially for insurance companies, which included an inexpensive fire-listening device and water detector, along with a hub for cloud communications.

Ammari says UEI does not have immediate plans to build out a complete consumer-facing home automation system – the company’s revitalized Nevo Home platform is mostly about entertainment – but he doesn’t rule out the possibility for the future.

Besides insurance firms and cable companies, UEI plans to target its existing hospitality customers. The company already provides remote controls to a whole lot of hotel rooms – rooms that also would benefit from smart thermostats.

“Today we have key accounts in hospitality for video,” says Ammari. “This will be an opportunity to maybe bring in some of our other capabilities, like Ecolink sensors and RCS thermostats.”

Acquiring RCS not only boosts UEI’s OEM portfolio for smart things, it also could ingratiate the company with utilities and other mass-market energy-management firms.

RCS has been involved with demand-side management and other technologies associated with the smart grid since forever. It has worked with virtually every popular home-control and smart-energy protocol since back in the X10 days. Today it’s ZigBee, Z-Wave, Wi-Fi, and even OpenADR for utilities’ automated demand response services.

UEI’s Latest Initiatives: QuickSet Cloud and Nevo Home

UEI has been controlling A/V devices since 1986. As such, the company has a giant database of IR codes and, more recently, codes for controlling entertainment devices via ZigBee (RF4CE), Bluetooth, IP and HDMI-CEC.

These codes – and the mechanisms to access them – are part of a UEI suite called QuickSet, which the company claims is embedded in some 400 million devices around the world.

QuickSet-enabled devices include such mass-market products as cable and satellite set-top boxes, gaming consoles, smart TVs and “many leading smartphones,” according to the company.

Recently, QuickSet moved to the cloud with a service called … QuickSet Cloud. It relieves hardware manufacturers of the burden of incorporating QuickSet technology into their products. More importantly, though, it enables richer integrators and on-the-fly updates.

With UEI’s huge database of controllable devices – from TVs to air conditioners – the company has learned to identify connected devices automatically, and control them with little or no configuration on the end-user’s part.

UEI’s auto-discovery platform is so rich, it can even delve into your TV and set-top boxes to determine which streaming services are available on the network … and then present them to the user in an on-screen display.

Ammari stops short of suggesting that QuickSet Cloud would apply to smart-home devices — UEI did show integration with Philips Hue at CES 2017 — but he does indicate UEI’s extensive cloud development could benefit RCS, delivering “a lot of control capabilities on a really smart memory footprint.”

He notes that thermostats, being “always on, always-connected devices” could serve as “some kind of gateway” in the future.

The plan today, however, is to help RCS “grow in the business they’re in today,” according to Ammari, who mentions the opportunity for RCS to exploit UEI’s manufacturing, product-design, operations and sales capabilities.

Residential Control Systems was founded in 1993 by Michael Kuhlmann and Bruce Wiens. In 1999, the company merged with the home-automation firm Integrated Home Solutions (IHS) to create the new RCS Technology, with IHS principal Mike Hoffman as co-founder. Kuhlmann continues to serve as CEO of the company, with Hoffman as CTO and Gene Goodell VP business development.