IoT Tech Leader, Kontrol to Acquire Building Solutions Company

Acquisition Company to Provide Established Contracted Order Book, Operational Synergies and Growth Opportunities

Kontrol Technologies Corp. (NEO: KNR) (OTCQB: KNRLF) (FSE: 1K8) (“Kontrol” or the “Company“), a leader in smart buildings and cities through IoT, Cloud and SaaS technology, has entered into a purchase agreement to acquire all of the issued and outstanding shares of a leading building solutions company (the “Acquisition Company“). The Acquisition Company provides integrated installations of complex heating, cooling, ventilation and building automation systems.

Acquisition Company Highlights

  • Audited revenues of $43 million for fiscal year 2020
  • Contracted order book of approximately $120 million for next 3 years
  • Annual Revenue Growth Rate in excess of 20% over the last 5 years
  • More than 20 years of operating history with established customer base
  • Synergies with Kontrol’s existing operating platform
  • Audited net income before tax of $128,000 for fiscal year 2020
  • History of positive Adjusted EBITDA from operations

“This acquisition represents another significant milestone in the execution of our plans to further scale our business,” said Paul Ghezzi, CEO of Kontrol. “In addition to an impressive order book, there are numerous synergies that the Acquisition Company provides in terms of scale and growth. Given our adequate current cash on hand needed to close the transaction, we hope to complete the acquisition in the near term and integrate the Acquisition Company into our operating platform.”

The Acquisition Company has traditionally focused on larger projects with one-time project revenues and a small percentage of its overall business with recurring revenue. Following the completion of the acquisition, Kontrol will seek to grow recurring revenues through vertical integration with its current building energy management software and ongoing service agreements.

“We have identified potential opportunities to grow the Acquisition Company’s EBITDA margins by changing its revenue mix through the addition of recurring revenues over time,” continued Ghezzi.  “This serves as a prime example of our target acquisition profile and we look forward to realizing the strong synergies resulting from the transaction, ultimately to generate sustainable value for our shareholders.”

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