Bosch acquires Climatec and strengthens energy and building technology business

Charlotte, NC

Bosch strengthens energy and building technology business with Climatec acquisition

Purchase of leading U.S. energy, building, and security solutions provider expands global footprint

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

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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 Boschund 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.

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.

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Latest updates

Climatec expands Southeast operations with the acquisition of Engineered Control Solutions, Inc.

Phoenix, AZ
August 6, 2024

Further growth in building automation and expansion of regional presence
Customers of both companies benefit from expanded range of building technology solutions that can increase safety, efficiency, and comfort.

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Phoenix, AZ – Climatec, LLC, a Bosch company, has acquired the business of Engineered Control Solutions (ECS), a leading building automation solutions provider and system integrator with offices in North and South Carolina. ECS has about 100 employees. Terms of the transaction were not disclosed.

Founded in 1999, ECS is serving customers in the Southeast US and nationally. The company provides building automation solutions for efficient control, regulation and monitoring of technical building equipment such as heating, ventilation, air conditioning and lighting across the education, government, healthcare, and commercial building sectors. These owners and operators of commercial buildings and infrastructures have benefited from increased efficiency and simplified processes, as well as improved comfort for users. ECS’ building experts and regional operations are an excellent complement to Climatec’s portfolio.

“ECS is a perfect fit for Climatec’s business and culture,” said Ramesh Jayaraman, president, Bosch Building Technologies Integrator Business – North America. “The professionalism and dedication of the ECS’s team to deliver innovative building solutions fully aligns with the Climatec entrepreneurial spirit and mission for operational excellence and world-class service.”

“Climatec and Bosch’s commitment to customers and employees, the strength of their building technology partnerships, and long-term business focus made this decision easy,” said Lee Revis, president, Engineered Control Solutions. “The fact that the deal coincides with our 25^th anniversary underscores our excitement for a great future ahead for our team and our customers.”

“We are thrilled to have ECS as a part of the Climatec team,” said Shawn Flahart, Climatec vice president for Building Automation Services. “The addition of the ECS team gives us countless new opportunities to expand our services, grow our business in the Southeast, and better serve our national customers.”

All associates and the management team will continue in their respective roles.

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About Climatec, LLC

For nearly 50 years, Climatec has invested in people, technology, and services needed to be its customers’ trusted business partner for building solutions. Today, Climatec is a leading provider of building technologies and energy solutions in the nation. Climatec’s technology partners include the world’s leading suppliers of building automation, security, life safety, and energy efficiency technologies. And since 2015, Climatec has been part of Robert Bosch, LLC. For further information see www.climatec.com.

Press/Media/PR Contact

‍Jill Boileau
Director of Communications
Communications@Climatec.com
(602) 819-4945

Top Reasons Arizona Cities and Towns Need Comprehensive Energy Infrastructure Investments Now

Inflation and spiraling costs have impacted us all. The price of gasoline, the cost of eggs, bacon and most other basic needs for food and transportation have exploded in the last few years. To combat these inflationary pressures, employees, unions and workers across all industries are expecting needed salary increases just to commute to work and put food on the table. Many municipalities are wondering, “What can we focus on to make some positive impacts and get a WIN?”

One of the major budget line items for most municipal governments (often just behind salaries and pensions) are their electricity and natural gas payments. Not a surprise to any CBO: utility increases in Arizona have shot up dramatically in the last few years. All the Investor-Owned Utilities (IOUs), such as Southwest Gas, Arizona Public Service (APS) and Tucson Electric Power Company, have seen commercial electricity rate increases skyrocket. From 2020 to 2021, Arizona’s average electricity price increased by 6%, making this the third largest increase in the western United States. The chart below further proves the upward trend of average electricity prices by comparing prices from 2005 to 2021.
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*Source:* *Senior Research Economist Jennifer Pullen of University of Arizona, 2022*

Many experts believe that with the mandated transition to more renewable energy production, the significant upward trend in utility rate increases will continue well into the future. Even as current rates rise, IOUs are slated to continue the upward trajectory on costs. Imagine your total utility bill doubling in the next few years.

According to KAWC, Southwest Gas increased rates in 2023 by 7.6% for residential customers and 13.7% for small business customers. Additionally, the Phoenix Business Journal reports that APS expects an average residential customer monthly bill increase of 13.6%. APS President Ted Geisler told KTAR News 92.3 FM’s Arizona’s Morning News that a proposed monthly base rate increase of at least 23% is necessary but likely won’t make its way to customers.

It is easy to focus on electricity rate increases, but with current energy policies and global market dynamics, natural gas prices have risen at an even faster pace than electricity with residential consumers experiencing upwards of a 36% increase since 2020.
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*Source:* *US Energy Information Administration, 2023*

So, if you are a city manager or city council member, what can you do to blunt these massive utility cost increases? Doing nothing or hoping the problem will go away is not a strategy. Leading cities across Arizona, including the City of Yuma, City of Tucson, City of Sierra Vista and Town of Gilbert, showcase how cities and towns can proactively combat the impact of rising utility costs with investments in modernization, efficiency and sustainability.

The City of Yuma, for example, made strides toward its mission to enhance sustainability by modernizing City facilities with exterior and interior lighting upgrades, park lighting improvements, HVAC and pool boiler replacements, smart building controls and pool pump variable frequency drive and solar array installations. This project relieves approximately $6 million in general funds over the lifecycle of the new equipment, achieving $434,555 in just the first year.

Most municipalities have contemplated energy and sustainability initiatives for years, but the required upfront capital, staff resource constraints, stakeholder coordination and complex analysis makes it hard to get projects off the ground. Cities may take several approaches, but there is one approach that is proven to be the most effective for completing projects in less time, with fewer resources and with lower risk.

Compared to “piece-mealing” projects one at a time or waiting for equipment to break down, a design/build energy services approach allows a city to look at energy holistically and through the lens of the long term. Bundling all pieces of the puzzle together–rather than one or two at a time, as typically done in traditional construction methods–comprehensively addresses deferred maintenance needs, as well as resiliency and sustainability goals. What’s more, is the legislative availability of streamlined procurement options available, which make it easy to competitively procure a single-point of accountability without hiring multiple consulting firms, and incurring all the incremental costs and delays associated with a traditional 4-5 year+ construction/retrofit process.

If energy efficiency and sustainability (plus blunting budget-busting utility increases) are on your to-do list and you are looking for reasons to prioritize energy infrastructure projects in 2023, read on:

TOP REASONS TO ACT NOW

PRICE & TIMELINE CERTAINTY
- According to CBRE, construction cost escalations have seen double digit increases for the last two years and are anticipated to escalate. If your city has constructed any facilities or has done any significant construction projects recently, you know firsthand the risks, delays, budget overruns, litigation, etc., that can result.
  
  Not to mention the other delays created by supply chain disturbances, with many components often taking up to 12 months to arrive. The combined impact of inflation and delays are costing billions, forcing many cities to defer decision making or cancel projects altogether. By the time projects are ready to be pursued, it’s common for cities to see projects at double the cost than was originally budgeted in years prior.
  
  Acting NOW, with a streamlined design/build approach, puts you in the driver’s seat and ensures you can lock down–and stand behind–the budgets and timelines you promise to stakeholders.
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GRANTS, INCENTIVES, REBATES
- More funding is available today from grants, incentives and rebates than ever before. Ranging from federal, state, local and private sector programs, municipalities have a chance to free up or stretch the impact of capital funds without taking on any debt. Finding a partner who has deep expertise in helping your city secure incremental funds is imperative. The money is out there.
- In addition to the billions in ARPA stimulus cities must obligate before December 2024, you can now also tap into an additional $370 billion from the Inflation Reduction Act (IRA) for clean energy generation, efficiency measures, improvements to water/wastewater facilities and EV charging infrastructure. IRA funds can help fund approximately one-third of the cost of solar for your city with direct payment tax incentives. Lighting, HVAC, battery storage and many other types of “electrification” also qualify for potential grants.
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EFFICIENCY - STILL YIELDS MUCH LOW-HANGING FRUIT
- It’s common for cities to think they’ve done all the low-hanging fruit there is to do if you have completed a few efficiency upgrades over the last decade. Even in relatively new facilities or buildings that meet LEED standards, run times and automation settings often get modified or overridden with time. Plus, technology improvements have changed drastically in just the last few years, particularly when it comes to ventilation standards or the electrification of natural gas-consuming equipment.
  
  By optimizing your current infrastructure to peak efficiency and today’s standards, you can reduce your facilities’ utility consumption by 30%-40% or more.
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PIECEMEAL & BREAKDOWN APPROACHES DON’T WORK
- When it comes to energy, piecemeal approaches or waiting for things to break leads to unintended consequences with a variety of negative impacts, including staff resource strain, comfort and productivity issues, emergency repair cost, etc. Furthermore, the stacking order for pursuing building efficiency and renewable energy projects is critically important to avoid alternative energy system oversizing, another common pitfall of a piecemeal approach.
  
  Having a single point of accountability for the energy analysis, design, implementation and overall savings assurance gets your projects off the ground without the risks of aforementioned budget overruns and delays. A comprehensive approach also allows you to reduce the load of your facilities first and then properly size solar energy and storage solutions to precisely meet the needs of your now more efficient facilities. The technology to achieve Zero-Net Energy and Carbon Neutrality is available today, however, these ambitious goals can only be achieved with a well-planned, comprehensive perspective.
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Find a city that has had success with a comprehensive energy program and ask them about their process. Ask for a sample RFP and adopt the document for your needs. Once you drive a competitive process, select a design/build partner and conduct a citywide assessment. You will then have the tools and data to align a scope of work and funding plan specifically targeting your stakeholder and city needs. Before proceeding with program implementation, you’ll be equipped with a whole picture perspective to make intelligent long-term decisions that best serve your city’s interest today, tomorrow and for the next twenty years. Act NOW, and you can capture a big WIN in the next year or two for your city, while striving to address the numerous other longer term challenges city leaders face today.

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Author: Thomas Jackson is Corporate Vice President for Sales & Major Projects for Climatec Energy Services. He holds a degree in Energy Resource Management & currently serves on the Board of Advisors for Sustainability & Technology at Eastern Illinois University. Climatec is a wholly owned LLC as part of the Robert BOSCH family of companies.