Mergermarket: Building Engines Seeks Buys Even as it Fields Own Suitors – CEO

Building Engines, a venture capital-backed real estate technology company for managing commercial properties, is actively seeking acquisitions, said CEO Tim Curran.

The Boston-based company is looking for real estate management SaaS buys with between USD 5m and USD 15m in annual recurring revenue. Over the next few months, it will look at targets in North America but the company could look internationally over the next few years in English-speaking markets like U.K. or Australia.

Building Engines welcomes advisory approaches about add-ons and will fund deals with proceeds from a recent capital raise, Curran said.

On 15 October, Building Engines raised a USD 12.7m capital round led by Wavecrest Growth Partners, with participation from River Cities Capital Funds, MassMutual Ventures and Camber Creek Ventures. This raise followed the group’s initial investment of USD 26.5m into Building Engines in 2016.

Building Engines is targeting two to three deals a year over the next 36 months. It is interested in software businesses that would provide enhancements to its building management platform. Targets should have unique commercial real estate management tech solutions, Curran said. He declined to name the specific capabilities it is seeking.

Building Engines has made two previous acquisitions. These were AwareManager, a Boston commercial property and facility management business in May 2018, and Real Data Management, a New York maker of building measurement and visualization software and related solutions in May 2019, both for undisclosed terms. Aware Manager had over 20 employees, while RDM had about 45, Curran said.

Building Engines is also looking for data sharing partnerships with real estate vendors, such as for service calls, and for reseller agreements of related vendor management products to be integrated with Building Engines’ product line. It has one of each type of agreement already in hand with insurance certificate management business myCOI and HVAC service billing company Genea, Curran said.

Building Engines’ solutions help manage commercial building operations, such as security procedures, tenant requests, staff communication and routine maintenance. It collects revenue via subscriptions and is enjoying about 40% to 50% revenue growth year-on-year. Curran said he expects similar growth going forward. Building Engines is profitable, said Curran, declining to disclose sales.

“Interest in an asset like Building Engines is accelerating big time. My phone rings off the hook with private equity firms (and) strategic buyers,” said Curran.

Curran described the approaches as exploratory. The VC-backed company is not interested in selling at this point because it sees room for growth both organically and through acquisitions.

Original article contributed by: Mergermarket