Smart Buildings

M&A brings Focus & Consolidation to the Building Performance Software Business

Memoori’s recent report on the Building Performance Software (BPS) business demonstrates that despite some 150 confirmed acquisitions in the last 6 years, the industry has at least 350 established suppliers delivering across 16 different market segments. These segments overlap and can cause confusion for buyers when they try to evaluate the best Return on Investment. This is particularly critical now that the major real estate owners are in the midst of investigating the impact of the Building Internet of Things (BIoT) on their business and they need to know what the BPS industry is doing to help them meet this challenge. Well the good news is that our report shows that right across the western world M&A, Investment and Strategic Alliances is working hard to bring together software solutions to meet the BIoT challenge. This is absolutely vital because the data from these software packages will eventually need to be transferred to IoT Data Services. […]

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Memoori’s recent report on the Building Performance Software (BPS) business demonstrates that despite some 150 confirmed acquisitions in the last 6 years, the industry has at least 350 established suppliers delivering across 16 different market segments.

These segments overlap and can cause confusion for buyers when they try to evaluate the best Return on Investment. This is particularly critical now that the major real estate owners are in the midst of investigating the impact of the Building Internet of Things (BIoT) on their business and they need to know what the BPS industry is doing to help them meet this challenge.

Well the good news is that our report shows that right across the western world M&A, Investment and Strategic Alliances is working hard to bring together software solutions to meet the BIoT challenge. This is absolutely vital because the data from these software packages will eventually need to be transferred to IoT Data Services.

Our report looks right across the structure and competitive landscape identifying some 358 players within 7 broad sectors reviewing the major players strategy in merger and acquisition, investment and strategic alliance with other players to bring together a business model that meets the buyers needs over the next 10 challenging years.

The highest number of acquisitions occurred last year, 45 in number, 30% of the total number of 150 since 2010. With 27 transactions having already been completed this year up to the end of May, we expect acquisitions of building performance software providers to continue at the same level as 2015, as consolidation continues in this fragmented market.

Although we cannot claim that our database of deals is exhaustive it is certainly amongst the most comprehensive available, and helps to paint a picture of the mood in the market as well as the M&A and partnering strategies of its respective major players.

The BPS business in 2015 was $12Bn and we forecast to grow to $18.75 by 2020 delivering a CARG of 8.1%. However there is a wide variation of growth and size between the 16 different segments. We believe that the technical market potential for BPS would allow for higher rates of growth but that requires the suppliers to make a much more focused effort to realise it.

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