Bosch becomes single-source provider of energy, building automation and security solutions for public, commercial and industrial customers in the US
Combined portfolio meet demands of growing market
Climatec to operate as a largely independent entity
Farmington Hills, MI – Robert Bosch North America Corporation has acquired Climatec, LLC, a leading provider of energy efficiency, building automation, security and life-safety solutions for the U.S. market. Headquartered in Phoenix, AZ, Climatec, LLC generated sales of 170 million dollars (128 million euros) in 2013. According to preliminary figures, Climatec increased its sales in 2014 to about 190 million dollars (143 million euros). The company employs some 670 associates at a total of twelve offices across Arizona, California, Nevada and Texas. Climatec has been majority-owned by Pegasus Capital Advisors, L.P. since April 2012. Terms of the transaction were not disclosed.
“With the addition of Climatec, we are expanding our global presence especially in the growing North American market, strengthening our portfolio and becoming a comprehensive supplier of solutions in the area of energy, building automation and security services,” said Dr. Stefan Hartung, member of the Bosch board of management responsible for the Energy and Building Technology business sector. “The entrepreneurial spirit, industry expertise, customer focus and shared cultural values that have made Climatec successful are an excellent match for Bosch. Our heating, energy service, security systems, software, sensors and storage technology expertise, combined with the Climatec portfolio, positions Bosch to achieve Energy and Building Technology business sector sales of ten billion dollars (eight billion euros) in 2020.”
“Over its 40-year history, Climatec has established itself as a trusted provider of building comfort, safety and efficiency solutions across nearly all building segments. I was immediately impressed by Bosch’s determination to create an environment that would preserve our business model and customer focus,” said Terry Keenen, president, Climatec, LLC. “I am confident that this acquisition will strengthen our position for sustained growth, benefitting our customers and employees.”
Integrated competencies for a growing market The market for integrated energy services, building automation systems and system integration is growing significantly in the U.S. and around the world. As global energy needs have doubled over the last four decades, customer demand for energy efficiency has increased. And recent years have seen greater demand for comfort, connectivity and security. Rising energy costs, increasingly complex energy systems and a changing regulatory environment foster major growth opportunities in the residential and commercial building sector as well as the services segment.
The Bosch Energy and Building Technology business sector combines several areas of expertise: broad technical systems know-how in video surveillance systems, intrusion and fire detection, access control, alarms, evacuation and public address systems, professional audio and conference systems, as well as water heating and comfort heating systems. As the global market leader in microelectromechanical sensors (MEMS), Bosch offers software and sensor technology for internet of things connectivity. The company also offers services for energy management, remote monitoring, and the handling of business processes.
Climatec is recognized in the building industry as an independent single-source integrator of critical building systems including energy services, building automation and security system integration in the U.S. market. The company provides consulting, planning, implementation and 24/7 remote management of comprehensive comfort, security, safety and efficiency solutions. Climatec is active in several market segments and industries including education, healthcare, the public sector, industrial/manufacturing, computing services, office buildings, federal, state and local government, hospitality and energy.
Combining these strengths, Bosch can now offer customers a complete portfolio of networked and efficient energy, building automation and security solutions.
Climatec continues as largely independent entity Climatec will operate as a largely independent entity, maintaining its offices in Arizona, California, Nevada and Texas. Operations will continue to be run by the same management team. Climatec will continue to represent and integrate numerous leading manufactures’ product lines across its wide range of services, including Bosch products. As before, the Bosch Security Systems division, Fairport, NY, will continue to sell their security and safety products in the North American market through leading distributors and system integrators.
About Bosch In the U.S., Canada and Mexico, the Bosch Group manufactures and markets automotive original equipment and aftermarket solutions, industrial drives and control technology, power tools, security and communication systems, packaging technology, thermotechnology, household appliances, healthcare telemedicine and software solutions. Having established a regional presence in 1906, Bosch employs 24,600 associates in more than 100 locations, with consolidated sales of $10.4 billion in 2013. For more information, visit www.boschusa.com, www.bosch.com.mx and www.bosch.ca.
The Bosch Group is a leading global supplier of technology and services. In 2013, its roughly 281,000 associates generated sales of 46.1 billion euros ($61.2 billion). Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its more than 360 subsidiaries and regional companies in some 50 countries. If its sales and service partners are included, then Bosch is represented in roughly 150 countries. This worldwide development, manufacturing, and sales network is the foundation for further growth. In 2013, Bosch invested some 4.5 billion euros ($6.0 billion) in research and development and applied for some 5,000 patents worldwide. The Bosch Group’s products and services are designed to fascinate, and to improve the quality of life by providing solutions which are both innovative and beneficial. In this way, the company offers technology worldwide that is “Invented for life.” Additional information on the global organization is available online at www.bosch.com, www.bosch-press.com, and http://twitter.com/BoschPresse.
*Due to a change in accounting policies, 2013 figures can only be compared to a limited extent with 2012 figures. The decision to forego the application of proportionate consolidation affects mainly BSH Bosch und Siemens Hausgeräte GmbH and ZF Lenksysteme GmbH (2013 consolidated sales volume of some $9.7 billion). 2014 exchange rate: 1 EUR = $1.32850. 2013 exchange rate: 1 EUR = $1.32812.
About Climatec Founded in 1975, Climatec is a leading provider of advanced building technologies and energy efficiency solutions. It serves building owners across nearly all market segments including education, health care, office, hospitality, industrial, federal, state and local government. Climatec’s automation and efficiency solutions improve building comfort and deliver significant energy and operational savings. Its life-safety and security solutions create productive environments that protect building occupants and business assets. Climatec is headquartered in Phoenix with offices across Arizona, California, Nevada and Texas, and has over 600 full-time employees. Visit www.climatec.com for more information.
About Pegasus Capital Advisors Pegasus Capital Advisors, L.P. is a private equity fund manager that has been providing creative capital and strategic solutions to companies across a variety of industries since 1996. Pegasus partners with management teams of growth companies, with a focus on those that benefit from the business implications of global resource scarcity. Sectors where this trend is most pronounced are food, water, energy, health & wellness and security. Pegasus currently manages approximately $2.0 billion in assets. Visit www.pcalp.com for more information.
New business models will be possible, new competitors will emerge
Potential competitive advantage for high-cost locations as well
Stuttgart – Connected industry, also called Industry 4.0, offers German companies numerous opportunities for new business and improved productivity, and thus also for increased competitiveness. This was the message from Dr. Volkmar Denner, the chairman of the Bosch board of management, at an event with representatives of the business community in Ludwigsburg, near Stuttgart. “Connected manufacturing processes have the potential to improve productivity by up to 30 percent,” Denner continued. “Thanks to Industry 4.0, we can also be competitive in a in high-cost country like Germany.” At the same time, the CEO of the technology and services company warned that not all companies have recognized these opportunities. On the one hand, he said, this means that many have not confronted the challenges of connected production early enough. “On the other hand, small and medium-sized enterprises and the mechanical engineering sector in Germany risk losing out to international competitors in this area.” In many cases, countries such as China, the U.S., and Korea are driving forward connectivity far more decisively, Denner argued.
Customized products at mass-production cost On the path to connected industry, Bosch sees itself as both a leading proponent and leading supplier of software and hardware. The company is currently working on connecting its more than 250 manufacturing locations worldwide. “Industry 4.0 also enables high flexibility in production,” Denner said. “On a connected assembly line, we can for example produce many different hydraulic valves for agricultural machinery side by side, and add new variants at any time – without any complex retooling.” That makes customized products possible in cost-effective mass production as well.
Too slow by international standards Denner is concerned that the increasing trend toward connectivity and the changes resulting from this are in many cases being given far too little attention in Germany. “Our progress is too slow by international standards. A lot will happen more quickly than many currently believe. But if we tackle it now, the internet of things and Industry 4.0 have the potential to help bring strong growth back to Europe.” Denner called on business and political leaders to quickly and concertedly work on creating the necessary practical conditions for connected manufacturing, as Germany otherwise risks wasting its head start in this field.
Background: Industry 4.0 – manufacturing on the internet of things In conjunction with fast data networks and software, sensors on components and machines enable objects to exchange information with one another without the need for human intervention (“internet of things”). In the future, even objects that up to now have not contained any electronics will be able to communicate with each other. The data created in the process will allow useful new information to be derived and interrelationships to be analyzed. For example, a machine can identify wear and tear and arrange for maintenance in good time. In this way, unplanned downtime can be reduced and productivity increased.
Company to be known in the future as BSH Hausgeräte GmbH
Household-appliance manufacturer to be run as a largely independent operation
Expansion of activities in connected buildings and appliances
Stuttgart and Munich – On January 5, 2015, following the antitrust authorities' approval, the Bosch Group completed its acquisition of Siemens's 50 percent share in BSH Bosch und Siemens Hausgeräte GmbH. The former 50:50 Bosch-Siemens joint venture can therefore now be run as a wholly owned Bosch subsidiary. The household-appliance manufacturer with its roughly 50,000 associates generated sales of some 10.5 billion euros in 2013. Following listing in the commercial register, the company will be known as BSH Hausgeräte GmbH.
The complete takeover of BSH will play a role in expanding Bosch's activities in the area of connected buildings and appliances. As part of smart home concepts, household appliances are to become even easier to use and more energy-efficient in the future – appliances will become even more user-friendly. For example, BSH has developed “Home Connect,” an app that allows users to control connected appliances from their smartphone or tablet PC using a wifi connection. BSH has already premiered its first appliances – ovens and dishwashers – featuring Home Connect, and more are to follow.
“Our strategic objective is to create solutions for a connected world,” says Dr. Karsten Ottenberg, who will continue to be at the helm of BSH in the future. The company will be run as a largely independent operation within the Bosch Group. “In the shape of Bosch, we shall continue to have a values-focused owner that fully supports our strategy,” Ottenberg says. As one of the world's leading household-appliance companies, it remains BSH's objective to further expand its position in the global market and to gain market share, especially outside Europe. BSH intends to double its sales by 2025. To achieve this, investment in research and development, as well as in the BSH brands, is to be stepped up, according to Ottenberg.
In acquiring all shares in BSH, Bosch is expanding its non-automotive business. With its consumer goods business now fully consolidated, roughly one quarter of Bosch sales will come from this business sector. The share of total non-automotive Bosch sales will then be more than 40 percent. In this way, Bosch will come a significant step closer to its target of generating roughly half its sales from non-automotive business.