Nemetschek acquires to boost building ops portfolio

Jan 11, 2019 | Hot Topics

Nemetschek just announced that its MCS Solutions business will acquire Axxerion, developer of facility and property management software, for €75 million. This adds to Nemetschek’s existing “Manage” offerings to address what the company sees as a potentially €20 billion opportunity.

At its capital markets day last November, Nemetschek told investors that it has €250 million of “firepower” to spend on its strategic initiatives, including mergers and acquisitions. Adding to its building management offering and growing this business outside of Europe have been long-term goals — clearly, management feels Axxerion will help on both fronts.

Asset owners, whether of a shopping mall, office building or residential units, want to increase their return on investment. They want to run the site more efficiently, with more predictive and less reactive maintenance, greater efficiencies in energy usage and people management, more effective equipment and space utilization, and so on — all of which argue for greater digitalization. But that’s not the case. Most assets are run using … Excel. Word. ERP systems for billing and work orders. Contract management by file drawer.

Getting from there to a smart building / mall / asset isn’t easy. Just like in manufacturing, it requires digitalizing everything and everyone. Enter, it hopes, Nemetschek.

Before this acquisition, Nemetscheks’ Manage brands included CREM and MCS. These are Integrated Workplace Management Systems (IWMS) that connect functions such as lease or rental contract management with work orders with energy metering. These integrations can lead to business analytics to answer questions such as, “is this tenant making us money or costing us money?” or, “can we boost occupancy yet remain compliant with local fire laws?”.

Axxerion adds to this toolset a subscription-based offering targeted at smaller real estate firms or companies for whom real estate isn’t the point of the business, such as insurers or hospitals that find themselves managing campuses in order to fulfill their main missions.

Nemetschek also says Accerion will enable it to move outside the German market, where it believes CREM holds a leading position, and will expand MCS’s IoT-enabled IWMS offering.

Nemetschek’s acquisition press release says that Axxerion currently serves nearly 2,000 customers across many industry sectors from three locations in the Netherlands and through indirect sales channels in Belgium, Germany, and the US.

Axxerion was “highly profitable” in 2018, with revenue around €12 million. Nemetschek will pay €75 million for 100% of Axxerion’s shares. The transaction is expected to be completed in January 2019.

New customers? Check. New geos? Check.