This article was written by Daphne Tomlinson, Independent Senior Research Associate at Memoori.
In the second quarter of 2019, M&A activity in the Smart Buildings space, continued at a similar level as in the first quarter. By the end of June, Memoori recorded 59 acquisitions, compared with 56 in Q1-2019. This article provides a snapshot of some of the notable acquisitions during this period, which are fully listed in our new report 'M&A and Investments in Smart Buildings H1 2019'.
Corporate Buyers Augment their Software Portfolios in the Commercial & Industrial Sector
Powerhouse Dynamics, a provider of a cloud-based IoT platform for multi-site retail customers, was acquired by Middleby, a leader in the food service equipment industry in April 2019. The combination of the Middleby Connect and SiteSage platforms is intended to enable a single comprehensive solution to improve efficiencies and manage a broad set of operating issues tailored to restaurant customers’ needs.
The majority investment in Tendril, the home energy management customer engagement platform for utilities, by Rubicon Technology Partners in December 2018 has enabled the company to make three acquisitions this year, the latest of which, FirstFuel Software, broadens their scope as a provider of utility customer engagement software for commercial and industrial businesses.
MACH Energy, a US provider of an energy management and sustainability software platform, was acquired in June by Integrated Energy Services (iES), a provider of grid relationship management software and demand response services.
Raptor Technologies, a provider of U.S. K-12 school security solutions, announced in June that it had acquired LobbyGuard Solutions, LLC, a visitor management system provider.
Mitsubishi Electric announced in May that they would acquire the remaining shares in Iconics, the U.S. software company focused on SCADA, IoT, mobile, analytics and cloud software products for the manufacturing, industrial and building-automation markets.
WeWork, the co-working space provider, continued its efforts to build up its software portfolio for its enterprise customers. Managed by Q, the developer of a platform used by office tenants to book cleaning, maintenance and administrative services, was acquired in April. Waltz, the developer of a mobile access control app, was acquired in June to enable seamless access for WeWork members across their spaces.
Acquisitions in the Smart Home Sector
In May 2019, Danfoss acquired full ownership of Finnish startup company Leanheat Oy, which specializes in the monitoring, control and optimization of heating in centrally heated buildings by using artificial intelligence (AI) and sensors. Danfoss thus further strengthens its position in the global market for Multi-Family Houses and District Heating Systems. By the end of 2018, Leanheat was installed in 100,000 apartments globally.
Resideo, the recent spinoff of Honeywell’s home automation businesses, continued its strategy of tuck-in acquisitions to expand its residential comfort portfolio: In May 2019, responsive energy efficiency technology for the smart home was acquired from Whisker Labs. LifeWhere, a provider of a remote monitoring and diagnostics solution for critical home appliances, such as water heaters, furnaces and air conditioners, was acquired in June.
SnapAV, a manufacturer of A/V, surveillance, networking and remote management products for integrators, announced the acquisition of Control4 Corp., a leading global provider of smart home solutions for $680 million in May 2019. Control4 reported annual revenues of $272.5 million in 2018. Private equity investment firm Hellman & Friedman, SnapAV’s majority shareholder since 2017, will invest additional equity as part of the transaction and be the majority shareholder of the combined company.
Private Equity Continues to Invest in the Sector
Dude Solutions was acquired in May 2019 by Clearlake Capital for $500 million, who have invested in a new buy and build platform. With $100 million revenues in 2018, Dude Solutions is a provider of cloud-based facility management software to over 12,000 North American clients.
Pelco, a provider of video security systems, was divested by Schneider Electric in May 2019 to Transom Capital. With reported revenues of $190M in 2018, Pelco is a shadow of its former self. Schneider Electric acquired Pelco in 2007 for $1.2 billion when it reported 2006 sales of $506M. Unfortunately for Schneider, the deal was never a success. While Pelco was a profitable company, it did not have the IP network camera technology which subsequently went on to dominate the market over the succeeding 10 years.
Memoori’s new report on M&A and Investments in Smart Buildings H1-2019, consists of 70 slides and supporting Excel files with complete listings of acquisitions and investments covering 2.5 years since January 2017, based on Memoori’s relational database of deals. The report includes 20 company profiles of acquisitions and investments together with 20 profiles of buyers and investment firms, presenting our view of their respective strategies and significant M&A or investment activity. We expect to update this report every six months.