This Research Note examines recent private equity backing of companies in the building technology space, with a focus on commercial real estate.
We reviewed this topic in January 2022 in the context of growth in hybrid workplace technology. Since then, PE investors have continued to support software and technology-focused companies across the sector.
There are many examples of private equity firms acquiring and investing in established players and startups in the smart buildings space. We highlight below some of the recent notable investments in building technology, workplace technology and physical security.
Private Equity Acquisitions & Investments
Building Technology Installation and Service
After an extended bidding war between Bain and Triton, which we covered in the initial stages in our previous article, November 2022, Triton, a European mid-market sector-specialist investor, finally completed the public tender offer for Caverion Corporation, in November 2023, owning 94,39 % of the shares.
Caverion is a Finland-headquartered provider of sustainable multi-technical installation and service solutions for the built environment across the Nordics and the DACH regions. 2023 revenue was EUR 2,491 million, with more than two-thirds of revenue coming from service contracts and one-third coming from building technology installation projects.
Workplace Technology
The unification of Condeco, Archibus, SpaceIQ, Serraview, and iOffice to form Eptura in October 2022 was one of the major mergers in the global integrated workplace management (IWMS) sector backed by Thoma Bravo, a US private equity firm known for investing in software firms.
In September 2023, Appspace, a US provider of a workplace experience platform, announced a significant strategic growth investment from Accel-KKR, a technology-focused private equity firm. We view this as a notable investment in a workplace management solution offering digital signage, an employee app, an intranet, space reservation and wayfinding functionality in a single platform to more than 160 Fortune 500 companies and over 10 million employees.
In January 2023, Sign in Solutions, a portfolio company of US private equity firm PSG offering visitor check-in software, acquired SCR Tracker and 10to8. Both startups founded in the UK, these acquisitions offer cloud-based education compliance, scheduling and appointment management software.
These deals are the most recent completed transactions of PSG, which has been building a portfolio of companies in the workplace and visitor management sector in recent years.
PSG are currently in a bidding war for UK-listed workplace and visitor management firm, SmartSpace Software, which would further extend their portfolio in this sector.
Physical Security Technology
In February 2024, Thoma Bravo announced an agreement to acquire Everbridge in an all-cash transaction valuing the critical event management firm at approximately $1.5 billion.
Its suite of Software-as-a-Service products encompassing mass notification, IT incident management, travel risk management, physical security information management (PSIM), population alerting, and risk intelligence, has enabled Everbridge to build up a diverse base of 6,500+ enterprise and public sector customers through its unified interface. Everbridge’s 2022 revenue amounted to $432 million.
In August 2023, ADT Inc. divested its commercial security, fire and life safety business unit to GTCR, a US private equity firm, for $1.6 billion. ADT Commercial installs, integrates, maintains and inspects commercial building safety and management technologies, which include fire detection and suppression, video surveillance, and access control systems. The unit, now rebranded as Everon, posted 2022 revenue of $1,230 million.
In October 2023, Triton provided growth capital for Wavelynx Technologies, a US provider of secure and open mobile-first identity and access control solutions. Founded in 2013, Wavelynx designs, develops and assembles mission-critical open hardware and software, including readers, controllers, and mobile credentials.
Building technologies, encompassing both installation and service and software-focused investments will continue to be an attractive proposition for private equity firms.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.