Bosch Buys $190 Million Integrator Climatec

By: John Honovich, Published on Jan 16, 2015

The big deals continue.

This time, Bosch has bought a US integrator, Climatec, that did ~$190 million in 2014 revenue.

*** *** ***** ********.

**** ****,***** *** ******* ** **********,********, **** *** ~$*** million ** **** *******.

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************* ****** *********** ** a ************* ***** ** the ********, *** ** particular, **** *********** *********** generally ******* / ****.

**** *****, ***** ** joining * ****** ** other ***** ********* **** offer ****, **** ** TycoIS / ******** ******** / ******** *****, ***** / ********* ********, *******, Johnson ********, ***.

Bosch's *** **********

******** ****** * ***** of ******** ********, **** building **********, ******, ****, safety *** ********.

** *** ***** ****,******** ***** ******** **** carry,******* *****, ** ******* Avigilon, ****, ********* *** Genetec. ******** *** **** a ***** ******** ****** for**** **** * ********* *** * ***** from ***** ** ****.

******** ******** ** *** US *********. ** ***** not ** ********* ** Climatec ******** ** ***** parts ** *** ******* or ***** **** ************* acquisitions ** ***** *** rest ** *** *******.

"Largely ***********"

** *** ************, ***** says **** ******** **** run ** * '******* independent ******, ****** ****:

"******** **** ******** ** represent *** ********* ******** leading *************’ ******* ***** across *** **** ***** of ********, ********* ***** products."

** ****** **** ***** will ******* ********** ***/** price ********* *** ******* more ***** ********, ***** allowing **** ** **** rival ********. **** ***** be ******* ** **** is **** ** ***** hybrid ************* / ***********, like ****.

[******: ***** ******** ******** feedback ********* **** **** will *** **** *** preferential ********* *** ********, in ***** ** *********, etc.]

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** ******* ***** ************ brands **** **** ********** value / ********** ** owning ***********. ******* ** independent ********** ** ************ harder, **** ** ****** for **** ***** ******, with ***** ***** ** undercut ****** ******. ****** one's *** ********** ***** to ****** ******* / distribution ** * ************'* products.

Good ** *** **** - ****?

Comments (14)

My first concern is, how will this affect their annual chin-dig at ISC West? Their gathering has to be the most enjoyable part of the show, including employee performances with real musical talent. My thinking is that this will certainly make that gathering even better.

The Magneatos, in-house Bosch band, ISC WEST 2014

There is another concern the Bosch might have been losing a very profitable account for some reason and bought them to maintain that business. I saw this happen in the monitoring market recently.

The way Bosch Security described this to us was that the deal was more for the non-security Climatec business than the security part, as they said security was a minority of Climatec revenue.

Look at the product lines they support and think about that statement again. Those were large system CCTV products. is this the only acquisition or just the first?

In the business office equipment Industry, Canon and Ricoh now own just about every major reseller in every market. It's an obvious trend to protect market share by getting closer and owning the customer relationship. I would expect to much more of this.

B, thanks. As an integrator then, what do you do to defend against that?

I might disagree here a little. Honeywell bought Pittway and then maybe because of the backlash sold the Securtiy dealer part and only have to deal with being a manufacturer and distributor. Schneider Electric, who had an installing company T.A.C suffered lost PELCO business from JCI and others because they are a competitor in their market space. JCI is a BOSCH National Account Partner as is SIEMENS who isn't known for selling security parts outside their company. ADT was a manufacturer and installing company of their own products before buying companies like AD and Sensormatic who also resold to independents. The Exacq dealers spoke up and they lost dealers over the Tyco/ADT relationship. The closest I have seen to this was UTC buying Red Hawk and promising to not use Lenel internally to satisfy the Lenel VAR's.

It seems to me that in almost every case where a manufacturer goes into competition with thier channel, the channel stops buying thier products. Maybe the smaller independents don't put enough of a dent in thier sales to make it a concern but I still think that's what will happen here. I won't be talking to customers about buying Bosch knowing that one of the biggest integrator competitors in my market is now owned by them. And, I don't believe for one minute that Bosch isn't going to give Climatec special consideration on pricing for, say a $1.5million dollar gaming opportunity - who are they trying to kid?

To those arguing that manufacturers buying integrators causes them to lose business, anyone with any color or details, for example, on how many integrators Exacq has lost due to the Tyco deal?

I am genuinely curious. I am sure there are some, I just don't have a sense of how significant it is and whether that can't just be offset by increased sales by the manufacturer's own integrator?

John, I doubt that's a metric they track. My observations are subjective and based on past experience, grape vine murmurings and peer to peer conversations with other integrators in my area but here is what I observe: The vast majority shake thier heads in disgust but move quickly to a "whatever, it doesn't really matter, I'll just start using Sony, Samsung, HikVision etc" attitude. Most do say they'll stop using the manufacturer who is now a competitor. I also observe that while I used to run into Pelco, Software House, Lenel as competitor offerings ALOT - I don't run into them much anymore and I attribute that to the fact that the local integrators who USED to sell those products stopped doing so when they became competitors. Now I run into Samsung, HikVision and OpenEye the most. Again, these losses may not matter to the Boschs' of the world and like you said, it may be offset but when you look at a company, like HikVision, taking a foothold you have to wonder if its the local integrators switching over that causes that?!?! It was the local integrators (I even remember when Climatec WAS one of the local guys before they grew up) that built Boschs' business up to the point they (Bosch) were one of the "big boys". When it was Burle, they were just little fish. These big companies seem to forget who made them what they are and in the long run, I think its a bad move on thier part to go into competition with thier channel. But....whatever, I'll just use HikVision, Samsung.....

Pelco's market share has certainly fell since the Schneider acquisition but it's quote certain the two main reasons have been decline in product positioning and degradation of customer support. There might be some integrators who objected to Schneider the integrator but I've never heard of any claiming that while hearing many who cite product / support issues.

As for Exacq, I have definitely heard concerns from integrators about Tyco's ownership and a few who said they left but it does not appear to be a mass exodus. The big thing in Exacq's favor is that product releases have continued at similar space / scope since the deal.

Was the sale price disclosed?

No disclosure of the sales price.

Maybe this is why Climatec has failed to call me back about a small access project my client needs done in Nevada.

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