Fortive Enhances Its Competitive Positioning In The Maintenance Software Market Through Its $1.2 Billion Acquisition Of ServiceChannel

Fortive Enhances Its Competitive Positioning In The Maintenance Software Market Through Its $1.2 Billion Acquisition Of ServiceChannel

On July 12, 2021, Fortive announced that it had entered into an agreement to acquire ServiceChannel, a provider of maintenance management software with an integrated service-provider network. Founded in 1999, ServiceChannel has more than 500 enterprise customers and an integrated network of more than 70,000 maintenance service providers. Fortive will pay approximately $1.2 billion for ServiceChannel, representing a nearly 10x multiple of its $125 million revenue. Fortive plans to pursue international expansion opportunities with ServiceChannel, which currently generates 95% of its revenue from North America.

ServiceChannel will bring a new dimension to Fortive’s already rich portfolio of maintenance applications through its marketplace platform that matches buyers with accredited service providers. Customers can use the ServiceChannel platform to source and vet providers, then track their performance through to job completion. There is currently only a small pool of software vendors offering similar marketplace solutions, such as Corrigo by JLL or QSI by Cushman and Wakefield. There are commercial opportunities for Fortive to bring this capability to its other CMMS products, such as Connectiv for the healthcare sector or Maintenance Connection focused on buildings and light manufacturing.

Fortive’s continued investment in the maintenance software market demonstrates that the sector has significant runway for growth over the next ten years. Even though the CMMS sector is mature, buyers will continue investing in new-generation products that support predictive maintenance and fieldworker mobile functionality. In the longer term, there remains significant scope for continued digitization of facilities management, given that many workflows still take place across paper or spreadsheets.

Following a wave of M&A focused on the smart workplace market, smart building vendors are now refocusing acquisition activity on high growth energy and maintenance software firms. This reflects that many of the attractive targets for space management have been acquired and this sector is getting increasingly competitive. For more insights into the evolution of the smart building market, read our report 10 Predictions For Smart Building Technology In 2021 And Beyond.