Energy Efficiency Services Market Scan and Acquisition Target Indexing



A leading HVAC systems manufacturer was interested in building its presence in the Energy Efficiency Services (EES) market to generate services revenues and additional product pull-through.  The client believed the EES market offered a strong growth opportunity, and was prepared to pursue one or more acquisitions to enter the market, but leadership needed to validate the size of the U.S. market opportunity. The Client wanted a better understanding of the market landscape in order to determine what type of acquisition target it should pursue. To this end, the client asked Beacon to rapidly validate the EES North America Market size, characterize the competitive landscape, and identify a force-ranked list of potential acquisition targets.



At project kickoff, Beacon worked closely with the client to clearly define the strategic footprint the client was seeking to acquire, and developed a set of key criteria by which potential acquisition targets could be evaluated. First, Beacon conducted a two-week rapid market scan and opportunity validation. Insights collected during Phase I helped refine the client's understanding of the requirements for success in the market, which allowed Beacon and client to collaboratively refine and weight each variable in the criteria set. In Phase II, Beacon shifted research focus to identifying and profiling companies that fit the client's target footprint. Beacon identified and profiled ~40 potential acquisition targets that met client criteria at high level, scored these companies in an Excel-based indexing tool, then conducted a deeper dive into the top scoring companies.  The final phase of work focused on developing of a set of recommendations for the client based on Beacon's assessment of the potential options. Over these seven weeks, Beacon interviewed over 150 market participants, including financial and industry analysts, regulators, customers, OEMs, and service providers. We engaged with the client's core team on a weekly basis to brief our progress.



Beacon's assessment identified a small top tier of Energy Services Companies (ESCOs) and highlighted a clear favorite. Later that year, the client acted on the study's recommendation and completed a significant acquisition of an Energy Services Company. The acquisition positioned the client to grow its services footprint rapidly in key regions and exceed its North American growth objectives.