This report does not constitute a rating action. ELATEC manufacturers security and access technology and specializes in RFID credentials and readers. Allegion continues to invest in acquisitions, mainly smaller bolt-on transactions, to further shift its product mix toward electromechanical, digital, and mobile door-opening solutions. The electronic security market is expanding twice as fast as the traditional mechanical security market because it is not reliant on the renovation and replacement cycle and new construction. We expect Allegion's continued innovation and technological advancements will strengthen its market share position. In our view, the company has the financial flexibility to accommodate its growth initiatives, including capital spending and acquisitions, without materially increasing its leverage, largely due to its strong cash flows and exceptional
