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This article was written by Daphne Tomlinson, Independent Senior Research Associate at Memoori. Part 1 of 2 articles covering Q1 M&A and investments in smart buildings.

In the first quarter of 2019, M&A activity in the Smart Buildings space, continued to maintain the momentum seen in 2018. By the end of March, Memoori recorded 43 acquisitions, compared with 42 in Q4 2018. This article provides a snapshot of some of the notable acquisitions this quarter.

The Top 4 Acquisitions by Deal Value in Q1 2019
  • The purchase of a 54% shareholding in Swiss-based agta record by Assa Abloy for $570M brings a majority stake of 93% for the global leader in door opening solutions and enhances its position in the competitive entrance automation market.
  • Mist Systems (location-based wireless services) was acquired by Juniper Networks for $405M, expanding Juniper’s presence in the rapidly growing cloud-managed segment of the wireless networking market for campus environments.
  • Cree Lighting was acquired by Ideal Industries for $310M.
  • With the acquisition of Axxerion for €75M, the Nemetschek Group further strengthens its competencies in Integrated Workplace Management System (IWMS).
Commercial Real Estate Stakeholders Augment their Technology Offerings

Aquicore, a US commercial real estate software startup with an all-in-one operations platform, has acquired Entic, a prescriptive analytics solution that generates targeted recommendations to drive peak utilities and facilities performance for commercial assets. With this acquisition, Aquicore begins to consolidate the fragmented proptech market.

In February 2019, CBRE acquired UK-based Romonet, which provides predictive analytics software and services for the data center. Founded in 2008, Romonet uses a patented cloud-based technology to unlock efficiencies and increase capacity at data centers. The software company’s focus has been to present as accurate a picture as possible of a data center’s costs, both in terms of capital investment and operational expenses. Romonet will be integrated into CBRE’s global Data Center Solutions business, which manages more than 800 data centers around the world.

The We Company (formerly Wework) augmented its technology offerings with the acquisition of an indoor location analytics company. Euclid offers a leading spatial-analytics platform that uses WiFi signals to understand how space is used without the installation of any additional hardware. With this technology, WeWork will help enterprises better understand how their employees use workplaces, and create more productive, engaging spaces for their teams.

Global Utilities Transition Towards Decentralized and Digital Energy Solutions

Global utility groups and energy service companies continue to acquire businesses serving the new market opportunities for distributed energy resource management, microgrids, Virtual Power Plants and energy storage solutions.

The sonnen Group, one of the leading manufacturers of smart residential storage systems was acquired by Shell New Energies in February 2019. With its virtual battery that is based on digital connected residential storage systems, sonnen offers innovative energy services for grid providers and customers. Estimated annual revenues for sonnen are $76.6 million.

In February 2019, Shell New Energies also acquired UK startup, Limejump, the developer of a digital energy platform, providing optimised routes to market for customers with electricity generating or consuming assets in the UK. Limejump manages one of the largest portfolios of batteries in the world through its Virtual Power Plant.

In March 2019, Engie, the French energy services giant, acquired a majority stake in tiko, a Swiss startup founded in 2012 which offers solutions for managing a wide range of electrical equipment (water heaters, heat pumps, solar panels, batteries, electrical outlets etc.) in private homes and participates in schemes to aggregate connected homes and create virtual power plants which react intelligently to fluctuations in the electricity network. Engie’s rationale for the acquisition is to create new services for their residential customers and complete their portfolio of load-balancing and storage solutions, which are crucial to the achievement of the energy transition.

Consolidation in Smart Home Sector Evident, with 12 Acquisitions in Q1 2019

Resideo Technologies Inc., a US public company following its spinoff from Honeywell International Inc. in October 2018 and a provider of residential comfort and security solutions, made its first bolt-on acquisition this quarter with the acquisition of Buoy Labs. The newly acquired startup, founded in 2015 produces a Wi-Fi enabled solution that tracks the amount of water used in a home, integrating smart software and hardware that can identify potential leaks and intervene to prevent them through its subscription-based app services.

Disaggregation is proving to be a key technology in the smart home, with Tendril acquiring EEme, Discovergy acquiring Watty and Generac acquiring Neurio.

Finally, Sierra Monitor changed hands at the end of March, when it was acquired by MSA Safety for $33 million. Sierra Monitor’s FieldServer protocol gateways are supplied to OEMs of building automation and life safety systems, including Siemens, Honeywell Tridium and Bosch. After reporting a loss in 2017 attributed to increased competition, the company returned to profitability in 2018, according to its recent 10K Report, with revenues of $22 million, of which 52% related to Fieldserver sales.

Memoori is continues to track M&A and Funding Investments in the Global Smart Buildings Space. Deals included in this analysis cover companies targeting both commercial and industrial buildings and smart homes.

We focus on innovation in the ‘Operate and Manage’ phase of the building life cycle encompassing IoT in buildings, energy management, physical and cyber security, proptech, facilities optimization, occupant comfort, workplace experience and more.

We expect to publish our annual analysis of deals in early 2020. In the meantime, if you are interested in receiving a regular quarterly update such as this article, please get in touch – daphne.tomlinson@memoori.com.