The IWMS Vendor Consolidation Whirlwind Continues As MCS Solutions Buys Axxerion For €75 Million

On January 11, 2019, IWMS vendor MCS Solutions (part of the Nemetschek Group) announced it has acquired Axxerion, a 100-person IWMS vendor. The acquisition provides MCS Solutions with 2,000 additional clients across Northern Europe and the US, including many small to mid-sized organizations. MCS Solutions paid €75 million ($85 million) for Netherlands-headquartered Axxerion, which generated revenues of €12 million ($14 million) in 2018. This revenue includes turnover from software firm Plandatis, which merged with Axxerion in September 2018.

Axxerion’s multi-tenant SaaS product will become MCS Solutions’ IWMS for the mid-market. Axxerion is one of the few IWMS vendors that has built up a strong customer base with small and medium-sized firms. In our 2017 Green Quadrant analysis, we found Axxerion’s lighter functionality and easy configurability allows for rapid deployments. There are also commercial opportunities for MCS Solutions in upgrading the Axxerion customer base with the smart building functionality (such as real-time space utilization tracking) offered through its COBUNDU platform.

This deal signals that 2019 will be another busy year for M&A in the IWMS market and adjacent CAFM and CMMS segments. We expect vendors will keep pursuing acquisitions to build international scale and grow resources. In addition, the injection of private equity funding in late 2018 to ARCHIBUS and iOFFICE grows the number of vendors with strong financial backing hungry for fast growth.

Vendors planning M&A in 2019 should expect fierce competition for the attractive deals which could push up purchase prices. While few firms will confess to having overpaid for an acquisition target – we have seen many situations where high purchase prices lead to a strong push for profitability by the parent company after a deal has closed. This can result in the quality of customer service taking a hit and high churn in the customer base.

In this ‘eat or be eaten’ environment no IWMS, CAFM or CMMS vendor can stand still. To learn about the investments into the broader proptech sector that are impacting the smart building market, register for the next Verdantix Smart Building webinar Proptech Raised $4 Billion In 2018 To Make Buildings Smarter on February 14, 2019.

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