M&A: Schneider Electric Acquires Liquid Cooling Data Center Specialist Motivair

Schneider Electric has acquired Motivair Corp., a liquid cooling data center specialist that reinforces Schneider Electric's sustainable IT services strategy. The $850 million purchase price involves 75% of Motivair. The buyer expects to purchase the remaining 25% in 2028.

This is M&A deal number 265 that Sustainable Tech Partner has covered so far in 2024. Related: See all M&A deals involving sustainability, climate tech and green IT services listed here.

Motivair, founded in 1988, is based in Buffalo, New York. The company, backed by roughly 150 employees, specializes in liquid cooling and advanced thermal management solutions for high performance computing (HPC) systems. The technology could help cloud service providers (CSPs) to run generative AI and large language models (LLMs) more efficiently.

The Schneider Electric-Motivair deal arrives at a key time. Roughly 73% of IT buyers are not completely prepared for the energy requirements of AI, research from Pure Storage and Wakefield Research finds. Moreover, 89% of IT buyers found ESG goals more difficult to meet as a result of upgrades to their IT infrastructure for AI adoption, Pure Storage and Wakefield added.

With those opportunities in mind, Schneider Electric's overall business generally spans four areas as:

1. Buildings, which is experiencing "growing demand for renovation, retrofit and sustainability initiatives related to energy efficiency."
2. Data center & networks, which experienced strong double-digit Q2 sales growth within the data center segment.
3. Infrastructure, which serves electric utilities.
4. Industry, which sells a combination of Energy Management and Industrial Automation.

In each of those areas, Schneider Electric emphasizes "electrification, automation and digitization to
enable a sustainable future."

Schneider Electric Acquires Data Center Cooling Company: Executive Perspectives

In a prepared statement about the deal, Schneider Electric CEO Peter Herweck said: “The acquisition of Motivair represents an important step, furthering our world leading position across the Data Center value chain. The unique liquid cooling portfolio of Motivair complements our value proposition in Data Center cooling and further strengthens our prominent position in Data Center build out from Grid to Chip and from Chip to Chiller.”

Added Motivair CEO Rich Whitmore: “Schneider Electric shares our core values and commitment to innovation, sustainability and excellence. Joining forces with Schneider will enable us to further scale our operations and invest in new technologies that will drive our mission forward and solidify our position as an industry leader. We are thrilled to embark on this exciting journey together."

Whitmore will continue to run Motivair's business under Schneider Electric's ownership.

Earlier M&A Deal: Smart Building Technology

Meanwhile, Schneider Electric in July 2024 announced plans to increase its ownership stake in Planon Beheer to 80%. The move reinforces Schneider Electric's focus on smart building management software, sustainability and associated carbon reduction services. Specific financial terms were not disclosed, though Schneider Electric said the deal values Planon at a "mid-single digit revenue multiple."

Schneider Electric has owned a 25% stake in Planon since December 2020. Planon has achieved a 22% compound annual growth rate (CAGR) since 2019, and revenue reached €161 million in 2023.