In this Research Note, we examine what’s behind Carel’s acquisition of a majority stake in Kiona, a Norwegian Saas player in building management, energy management and refrigeration management. Our article is based on Carel investor presentations and reports from the seller, Swedish private equity firm Summa Equity.

Carel Industries SpA is an Italian public company manufacturing control products for HVAC and refrigeration applications, with 2022 revenues of €544.9 million (+29.6% compared to 2021). Their control products are sold to Original Equipment Manufacturers (OEMs) of HVAC equipment and in the food retail and food service segments of the commercial refrigeration market.

Headquartered in Trondheim (Norway), Kiona was formed in 2021 following the merger of 5 synergistic companies providing software and digital competences: IWMAC (Norway), Egain (Sweden), Cebyc (Norway), Moldeo (Sweden) and Alpha ECO (Switzerland).

Kiona provides SaaS solutions to reduce the environmental footprint of refrigeration systems and buildings through the control and optimization of energy usage. The group counts 17 offices across 8 countries in Northern Europe and employs 150 people.

Through a flexible, open platform, Kiona integrates and connects technical systems across different brands. The company has a contractor network in Scandinavia with 200+ partners in Norway and Sweden.

History and Development of Kiona

Swedish private equity firm, Summa Equity, acquired Egain in 2016. IWMAC and Egain merged in March 2021 to drive sustainability in building energy management. The two companies have a shared vision enabling better monitoring, control and optimisation of energy use of buildings, across the retail, industrial, commercial and residential sectors.

Also in March 2021, the newly merged companies acquired Cebyc, a provider of environmental management and reporting software. The company develops and distributes the ISO-certified Energinet software to more than 4 500 clients, representing 25 000 buildings and 12 000 users, primarily in northern Europe. In 2020 the combined turnover of the three companies exceeded €18 million.

In May 2021, the merged group acquired Moldeo, the company behind WebPort. Moldeo is a provider of software for visualizing control systems, mainly focused around building automation. Their flagship product, Web Port, scales from HMI to SCADA with a broad set of features that balances ease of use and flexibility. Through their partner network, covering most of Sweden, 4,000 installations have been delivered.

Kiona Platform

The company already serves 57,000 facilities and food retail stores across Europe, with its suite of software. 2022 was reported to be the year for Kiona to reap the synergies of the recent mergers, with over 290 cross-deliveries of 2 products or more finalized. It has resulted in strong double-digit growth in Kiona’s EMS and SCADA products, while the self-learning AI engine Edge experienced a very strong backlog and pipeline. This lays a solid foundation for ramping up growth in 2023 across a broader installed base.

Carel Acquisition

Carel signed an agreement to acquire a c. 82.4% stake in Kiona Holding AS for a consideration implying a 100% Enterprise Value of NOK 2.35 bn (c. €210 million). With 2022 revenues of €21 million, the EV/Sales ratio is 10x.

Carel’s strategic rationale for this acquisition is to strengthen its positioning in Software-as-a-Service and further expand its data-driven digital solutions. The combination of Kiona’s analytics capabilities with Carel’s HVAC-R control products and IoT offering is expected to enhance the group’s smart building software offerings through a platform dedicated to energy efficiency.

This strategy emulates that of its major HVAC-R control products competitors: Siemens Building Products acquired Brightly Software in 2022 to accelerate its growth in digital revenues while Johnson Controls recently acquired FM:Systems to enhance its IWMS software portfolio.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.