Mergers and acquisitions have become commonplace in the smart building sector. The fact that so many individual systems come together to create the complex entity broadly defined as “the smart building” lends itself to firms bringing together their unique skills in order to offer a more complete service to their customers. In the real estate sector, it is building owners and their teams that make up the key customer base for the entire smart building vendor spectrum, so specialists joining forces makes complete sense in the emerging industry.
One such deal exemplifies this trend, the recent acquisition of Austrailian building optimization firm Buildingsense by US-based BuildingIQ, who are also active in Australia. In fact, the two companies combined have provided intelligent building services for more than 30 buildings across Australia, including the Melbourne Hotel, Cockburn Operations Centre, and Flinders Centre Bankstown.
Buildingsense was founded in 2015 by Hari Singh and is headquartered in Perth, Western Australia. The firm has capabilities in services related to the design, supply, engineering, installation, commissioning and service of building technologies. Additionally, Buildingsense has the distribution rights in Australia for the integrated Building Management Systems (BMS) and related building technologies of the Swiss-based Sauter Group; and has partnered with a number of companies – including Pettinaroli and GAMI, to offer valves, air handling, and fan coil units. Buildingsense and BuildingIQ have also enjoyed a strategic partnership prior to the aquisition.
“The strategic partnership with Buildingsense, working on multiple greenfield contracts in WA and NSW to deliver our 5i Platform, has been a strong contributor to our overall growth in Australia, delivering total bookings of over A$4.0 million - approximately A$2.5 million of which is still to be recognized as revenue,” the financial documents surrounding the transaction read.
BuildingIQ has typically focused on serving the existing building market through retrofit, whereas Buildingsense has primarily targeted new construction. Their combined experience will allow them with BuildingIQ’s 5i Platform of technology-enabled services for new BMS and retrofit projects translate to lower costs and increased efficiency throughout the build process.
“Until recently, we have offered optimization-as-a-service to owner/operators of existing buildings regardless of a building’s state,” said Steve Nguyen, vice president of products for BuildingIQ. “The acquisition of Buildingsense gives us the opportunity to embed optimization of operations, energy, and comfort in the form of our 5i suite of services right from the beginning in new buildings and major retrofit projects. Managing projects and providing our services to the greenfield segment means we extract, catalog, and analyze data as well as actions taken from the beginning of a building’s life-cycle. Given our solutions are cloud-based, the wealth of knowledge that we are capturing is invaluable to building owner/operators and facility professionals alike.”
BuildingIQ have acquired Buildingsense for the issue of $825,000 of Chess Depositary Interests (CDIs) and deferred cash payments of $200,000 payable over two years. The firm also anticipates significant financial return from the deal, forecasting additional revenue of approximately A$1,000,000 and net positive cash flow of approx. A$350,000 in the first half of 2019. The primary benefits are expected to come from the greenfield sector, where improved sales and marketing capabilities, as well as expanded distribution rights, should offer improvements in the first 30 days, the company hopes.
“The acquisition of Buildingsense, which has been a highly valued partner of BuildingIQ in Australia since 2016, secures our greenfield market opportunity locally and delivers significant financial benefits to the Company. Importantly, it also provides a platform for our previously stated intentions to grow this sector globally.” Mr. Michael Nark, President & CEO of BuildingIQ, said after the official announcement. “The deal strengthens our sales and marketing capabilities in the greenfield sector and also allows BuildingIQ to offer additional 5i Platform enabled solutions – Sauter BMS and Pettinaroli Valves – to clients locally through distribution rights owned by Buildingsense.”
BuildingIQ data-enabled optimization services for the new BMS and retro-commissioning market ensure zero energy intensity drift, capture and catalog deep system knowledge and maintain a high-level of operational, comfort, and energy optimization. By pushing data storage, analysis, diagnosis, and asset information into the cloud, BuildingIQ creates a central knowledge platform that minimizes much of the risk and guesswork of implementing a BMS or major retrofit project. Buildingsense’s complimentary offering makes this a match made in smart building heaven.
“The legacy we created through the Buildingsense partnership in Australia creates a platform for global growth in the greenfield space,” Michael Nark, CEO of BuildingIQ commented. “We have strengthened sales and marketing capabilities in this area now that will drive our ability to service new construction in North America and beyond, where we already optimize existing and retrofit buildings.”