Smart Buildings

Robust Market for Smart Buildings M&A in 2021

A record number of acquisitions (286) in the smart buildings space in 2021 accounted for a 31% increase on 218 deals in 2020 and a 10% increase on the previous record of 259 transactions in 2019.  There was a robust market for mergers and acquisitions (M&A) among both security product manufacturers and systems integrators last year, with physical security deals accounting for over 40% of acquisitions in the smart buildings space.   The table below highlights 10 completed deals with acquired revenues above $150 million. Six deals are in the physical security sector while the remaining transactions are split between the facilities management, HVAC solutions, smart home and Commercial Real Estate (CRE) service sectors. Major Smart Building Acquisitions in 2021 Allied Universal a leading North American security and facility services company announced the acquisition of G4S plc, creating a global integrated security services company. G4S is active in around 85 countries and has 533,000 employees.  The combination of Allied Universal […]

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A record number of acquisitions (286) in the smart buildings space in 2021 accounted for a 31% increase on 218 deals in 2020 and a 10% increase on the previous record of 259 transactions in 2019. 

There was a robust market for mergers and acquisitions (M&A) among both security product manufacturers and systems integrators last year, with physical security deals accounting for over 40% of acquisitions in the smart buildings space.  

The table below highlights 10 completed deals with acquired revenues above $150 million. Six deals are in the physical security sector while the remaining transactions are split between the facilities management, HVAC solutions, smart home and Commercial Real Estate (CRE) service sectors.

Major Smart Building Acquisitions in 2021

Allied Universal a leading North American security and facility services company announced the acquisition of G4S plc, creating a global integrated security services company. G4S is active in around 85 countries and has 533,000 employees.  The combination of Allied Universal and G4S will create a combined business that is expected to generate approximately $18 billion in annual revenues. The largest security services firm in the US also acquired SecurAmerica last year, an Atlanta, Georgia-based security company with revenues exceeding $467 million and more than 13,500 employees. 

Carrier, the global provider of HVAC, intelligent building and cold supply chain solutions, completed the sale of its Chubb fire and security systems installation and service business to APi Group in January 2022. The sale enables Carrier to focus on its core HVAC and fire & security product businesses.  The acquisition by APi, a provider of safety, specialty and industrial business services in over 200 locations worldwide, strengthens the group’s strategic platform and expands its geographical reach. 

In May 2021, Teledyne Technologies Incorporated, an industrial sensor giant, completed the acquisition of FLIR Systems, Inc. which offers a diversified sensing solutions portfolio including thermal imaging cameras, visible-light imaging systems, location systems, measurement and diagnostic systems, and advanced threat-detection solutions. The major strategic rationale for Teledyne’s acquisition was reported in their 10Q as “the synergies in merging with a business that has the same core business model based on proprietary sensor technologies, but with different complementary products and markets”.

Securitas, the global security services business comprising guarding, electronic security, fire and life safety solutions, announced a transformative acquisition of Stanley Security, the electronic security systems installation and service business of Stanley Black & Decker, making this their largest acquisition to date. This is a significant step towards Securitas achieving its ambition of doubling sales from higher-margin security solutions and electronic security by 2023, by migrating away from staff-intensive guarding. 

In September 2021, ABM Industries announced the closing of its previously announced acquisition of Able Services, a leading facilities services company headquartered in San Francisco. Founded in 1926, Able is the largest family-owned provider of building maintenance, engineering and facility operations in the United States, with revenues of $1.1 billion. Engineering services represent approximately 60% of their total revenues, with janitorial services accounting for approximately 40%. The acquisition will bolster ABM’s engineering and technical services, which are expected to generate almost $2 billion of combined annualized revenue and expand ABM’s sustainability and energy efficiency offerings amid growing demand for environmentally responsible solutions.

In May 2021, Johnson Controls International plc completed the acquisition of Silent-Aire. The acquisition establishes a leadership position for Johnson Controls in hyper-scale data center technology and expands its offering of cooling solutions, complementing its existing HVAC portfolio. 

Protec Fire & Security, acquired by Bosch in December 2021, is one of the largest system integrators for fire detection and security technology in the UK, with around 1,100 employees and expected sales in fiscal 2021 of GBP 125 million. The acquisition expands Bosch Building Technologies business in the UK, the largest market in Europe besides Germany.

Ecobee, the Canadian smart thermostat firm, was acquired by Generac, the generator manufacturer, in November 2021 to augment its residential energy storage business with energy management devices for the smart home. 

In November 2021, JLL closed the acquisition of Building Engines, the provider of a building operations platform that streamlines everything from work orders to maintenance scheduling and tenant engagement in one place. JLL also intends to leverage Building Engines’ open API infrastructure to integrate the platform more broadly with the greater real estate ecosystem, including the product portfolio developed by JLL Technologies (JLLT).

We believe this M&A trend is set to continue for the next 2 to 3 years as more and more companies look to add digital capabilities to their offerings, redefine their business models, expand their geographical reach and attempt to remain competitive in the light of new market entrants. 

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

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