Assa Abloy's Insider Buys and Pedestal Pro Acquisition Signal Strong Upside Potential

The global security solutions market is primed for growth, driven by rising demand for smart access control systems, cybersecurity, and physical infrastructure integration. ASSA ABLOY AB (publ) (STO:ASSA B), a leader in door opening solutions and access control systems, is positioning itself to capitalize on this trend through strategic acquisitions and a surge in insider buying by top executives. Recent moves by CEO Nico Delvaux and Americas Division head Lucas Boselli—coupled with the accretive Pedestal Pro acquisition—highlight a compelling value proposition for investors. Let's dissect how these actions signal upside potential.

Insider Buying: A Vote of Confidence in Current Valuations

The most striking signal of executive confidence comes from the June 2025 insider purchases by Nico Delvaux and Lucas Boselli.

• Nico Delvaux, CEO, acquired 13,388 shares at SEK 311.65 per share on June 9, totaling SEK 4.17 million. This purchase increased his holdings to 530,372 shares, marking his largest individual stake increase in over a year.
• Lucas Boselli, Executive Vice President and Head of the Americas, bought 1,000 shares at SEK 311.65 on the same day, reflecting his alignment with the company's growth trajectory in key markets.

These transactions occurred at a price near the current share price of SEK 292, suggesting both executives believe the stock is undervalued. Notably, insider ownership now totals 9.6% of the company, worth SEK 31 billion, with net buying of 234,260 shares (SEK 67 million) over the past 12 months—far outpacing divestments. This activity underscores a rare consensus among top management that now is the time to invest in ASSA ABLOY's future.

Pedestal Pro Acquisition: A Strategic Win for U.S. Market Dominance

The Pedestal PRO acquisition, finalized in June 2025, further amplifies this bullish narrative. Pedestal PRO, a U.S.-based manufacturer of access control pedestals and bollards, generates $11 million in annual revenue with a strong EBIT margin, making it an immediate EPS accretive asset.

Why This Deal Matters:

1. Strategic Fit: Pedestal PRO's innovative architectural solutions (e.g., integrated access control and security bollards) complement ASSA ABLOY's electromechanical offerings, enabling the company to become a one-stop shop for physical access systems in the Americas.
2. Market Leadership: The acquisition strengthens ASSA ABLOY's position in the $20 billion U.S. access control market, where it now competes more effectively against rivals like Honeywell and Allegion.
3. Sustainable Growth: Pedestal PRO's customer base spans equipment manufacturers, system integrators, and security professionals—sectors critical to scaling ASSA ABLOY's aftermarket and retrofit services, a high-margin business.

As Lucas Boselli noted, the deal creates “synergies in product offerings and enhanced competitiveness”, directly addressing customer needs in both physical and digital security.

Financial Catalysts: EPS Growth and Operational Resilience

While the Q1 2025 results showed an 8% sales increase to SEK 37.9 billion, the 22% drop in operating cash flow to SEK 2.4 billion (due to inventory buildup ahead of tariffs) raises near-term execution risks. However, the Pedestal PRO acquisition's accretive nature and insider buying suggest management is prioritizing long-term value over short-term noise.

• Near-Term EPS Boost: Pedestal PRO's profitability will likely offset margin pressures, with 2025 earnings expected to benefit from cost synergies.
• Structural Growth: The company's focus on aftermarket sales (which grew 5% in Q1) and strategic acquisitions (like Pedestal PRO) positions it to outperform peers in a consolidating industry.

Investment Thesis: A Bullish Call on Structural Growth

The combination of insider confidence, accretive M&A, and strong demand drivers (e.g., smart city infrastructure, cybersecurity upgrades) makes ASSA ABLOY a compelling long-term investment.

Key Buy Signals:

• Executive Ownership: Insiders buying at current prices signal confidence in a fair value of at least SEK 320–350, implying 10–20% upside.
• Pedestal Pro Synergies: The deal's accretive impact and U.S. market expansion could lift 2025 EPS by 2–3%, assuming steady sales growth.
• Valuation: At 16x 2025E EPS (vs. a 5-year average of 18x), the stock is undervalued relative to its growth profile.

Risk Factors:

• Inventory Overhang: Tariff-related stockpiling may pressure margins in 2025.
• Geopolitical Risks: Weakness in APAC residential markets (noted in Q1) could persist.

Final Verdict: Buy ASSA ABLOY for Access Control Dominance

ASSA ABLOY's strategic acquisitions and insider-led buying paint a clear picture of a company poised to capitalize on secular trends in security solutions. With Pedestal PRO adding immediate EPS value and executives doubling down on their stakes, investors should view dips below SEK 300 as opportunities to build positions.

Target Price: SEK 350 by end-2025 (15% upside).

Dave Michaels
June 6, 2025