M&A: Trane Technologies Acquires Smart Building, HVAC Energy Efficiency Specialist BrainBox AI

Trane Technologies has acquired BrainBox AI, which develops cloud-based technology to make commercial buildings and HVAC (Heating, Ventilation, and Air Conditioning) systems smarter, greener and more energy efficient. Financial terms of the deal, which is expected to close in early 2025, were not disclosed.

This is M&A deal number 268 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.

M&A Deal Seeks to Boost HVAC Energy Efficiency

Trane Technologies, based in Swords, Ireland, was founded in 1871. The company is a massive provider of HVAC and refrigeration systems. Backed by roughly 40,000 employees, the company generated revenues of $17.7 billion in 2023, up 10.5% from 2022. 

BrainBox AI, founded in 2017, is based in Montreal, Quebec, Canada. The company, led by CEO Sam Ramadori, has about 190 employees. The firm develops autonomous building technology to improve the performance of HVAC (heating, ventilation and air conditioning) systems.

BrainBox AI's cloud software uses "advanced deep learning algorithms to predict building energy needs, automate HVAC systems, reduce energy consumption by up to 25% and reduce GHG emissions by up to 40%," the company said. More than 14,000 commercial buildings leverage the technology.

BrainBox AI works with technology partners and systems integrators to support customers in such sectors as hotels, commercial retail, grocery stores, airports and more. For example,  Will Solutions and BrainBox AI are partnering in Quebec and Ontario, Canada to promote artificial intelligence (AI) for HVAC systems across sustainable communities.

Trane Technologies and BrainBox AI have partnered for about two years. Together, their technologies can analyze live data from multiple sources; accurately predict zone temperature and energy loads; and perform system improvements to optimize energy usage, Trane asserted.

Once the deal closes, BrainBox AI CEO Sam Ramadori and CTO Jean-Simon Venne will continue to lead the BrainBox AI business under Trane's ownership. Also, all BrainBox AI employees will join Trane.

M&A Experience

Both Trane Technology and BrainBox AI have M&A experience. Example acquisitions include:

• Trane Technologies in 2023 acquired Nuvolo, a ServiceNow partner that provides enterprise asset management software and services. Financial terms of the deal were not disclosed.
• BrainBox in 2024 acquired the Automation Division of Turntide Technologies, which develops sustainability technologies that drive down energy consumption and operating costs in buildings, agriculture and electric transport.
• BrainBox AI in 2023 raised $20 million and acquired a multi-site retail (MSR) energy management system integrator.

Executive Perspectives

In a prepared statement about the deal, Trane Technologies Chief Digital Officer Riaz Raihan said: “Advanced AI technology is supercharging what’s possible as we reduce energy and emissions from the built environment,. BrainBox AI and Trane Technologies share a passion for accelerating and scaling innovative, customer-focused AI solutions and smart building technologies that address the world’s pressing climate challenges. We look forward to welcoming the talented BrainBox AI team.”

Added BrainBox AI CEO Sam Ramadori: “At BrainBox AI, we believe in the power of AI in addressing climate change,. Combining BrainBox AI’s advanced technology with Trane Technologies’ leading digital platform and best-in-class global direct sales capabilities will accelerate the deployment of smart building solutions worldwide and achieve greater outcomes for our people, customers and the world. We look forward to an exciting new chapter for BrainBox AI as part of Trane Technologies.”

Smart Buildings and Carbon Reduction: Market Forecasts

Demand for smart building solutions that reduce carbon emissions appears steady to strong, depending on which market forecast you potentially believe. For instance:

• The global building automation and control system market will reach $168.8 billion by 2031, up from $87.3 billion in 2022, Transparency Market Research forecast. That's a compound annual growth rate (CAGR) of 7.9%, the firm said.
• Spending on building management systems is expected to reach $19.25 billion in 2023, up from $6.65 billion in 2016. That's a 16.7% compound annual growth rate (CAGR) during the forecast period, according to MarketsAndMarkets. 

The U.S. government also is assisting the market. For instance, the Biden administration was striving to spend $250 million to help federal agencies implement net-zero building projects. The incoming Trump administration, however, appears to be far less focused on sustainability projects.