Latest value deal adds $155m order book and massive recurring revenue potential overnight...

By Patricia Miller

Aug 05, 2021

Kontrol Technologies seize the opportunity to stamp out energy waste in buildings.

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Kontrol Technologies – Seizing a huge ground floor opportunity amid the global rush to stamp out energy waste in buildings

KONTROL TECHNOLOGIES CORP. NEO:KNR OTC:KNRLF | FSE:1K8

There is an enormous number of commercial buildings in North America.

In fact, these structures are thought to cover roughly 90 billion square feet in total—enough to envelop Los Angeles County more than two times over.

Collectively, these buildings use a lot of energy.

It’s hardly a surprise—given their scale, they probably need to.

But while this may be the case, there are also severe problems when it comes to the way in which this energy is actually consumed…

You see, it’s currently estimated that around 30% of the energy used by North America’s commercial buildings is wasted.

Not only that, but it’s now thought that these buildings are also responsible for up to 40% of the region’s greenhouse gas emissions.

Whatever way you look at it, it’s an unsustainable situation.

And it becomes all the more concerning when you consider that, by 2050, the goal is for every commercial building in the world to achieve net-zero energy use.

It’s not as if the industry can hide from these problems.

After all, it’s thought that buildings will be responsible for consuming more than half of the world’s energy by as soon as 2030.

So, with close to a third of that energy currently being wasted, there’s still some way to go before the problem is fixed.

Excitingly, these issues have given rise to an enormous opportunity in making commercial buildings cleaner and more efficient when it comes to energy consumption.

In fact, the addressable market for such ‘smart buildings’ is already thought to be worth more than $100 billion a year in the US and $600 billion globally.

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And this is why Kontrol Technologies represents such an exciting investment right now.

You see, thanks in part to the transformational acquisition it has just completed, which adds an order book worth in excess of $155 million to its operations…

Kontrol is poised and ready to claim a very significant slice of the Smart Building market as it continues to boom.

As it does so, it will be the smart investors who got in on the ground floor who are most likely to enjoy game-changing returns.

To learn more about how the deep value deal that has just added a $155 million order book to Kontrol Technologies’ roster, READ OUR EXCLUSIVE REPORT

Blue-chip clients and powerful data insights—Kontrol’s strong fundamental position

Before considering Kontrol’s recent acquisition, it’s worth noting that the company already represents a highly attractive investment proposition.

Indeed, by deploying the latest building automation devices and patented energy-monitoring technology, Kontrol has not only been able to establish a portfolio of major blue-chip clients paying out strong recurring revenues….

But, thanks to the data it collects, it is consistently able to improve the quality of its service by increasing its own knowledge of how to reduce costs, create better energy efficiencies, and lower GHG emissions.

Indeed, thanks to the solid foundation built along with the new acquisition, Kontrol anticipates 2021 revenues of between $33 and $35 million.

That’s more than double the $13 million it generated in the 2020 financial year.

But still, though this sum is already extremely promising, the fact is that Kontrol is now ready for much bigger things.

In fact, the business has even identified a clear path to $100 million-a-year turnover.

How does it plan to do deliver on this?

Well, for one thing, Kontrol expects to enjoy significant natural demand growth from customers looking to make their existing buildings more energy-efficient and ‘smart’.

But, perhaps most excitingly, the business is also making key strategic acquisitions that accelerate its revenue growth even further.

As we’ll see next, the company has just taken a major step forward in this area, closing on a deal that is not only its biggest to date but also puts it well on its way to hitting its ambitious turnover targets.

The recent acquisition of Global HVAC could be a game-changer in itself

Kontrol is well-known for making smart and strategic acquisitions.

The focus has always been on value, with the company searching out the ideal combination of solid cash flows and an attractive valuation.

It’s also keen to always ensure the smoothest transition possible and the most effective integration of its own technology and practices.

The approach was already well established, having underpinned a total of five smart deals throughout Kontrol’s history.

But it has never been used to greater effect than with the group’s most recent acquisition of a more traditional building solutions business called Global HVAC & Automation.

Indeed, this deal stands to be an absolute game-changer for Kontrol that could transform its bottom line like never before.

How come?

Well, the simple fact of the matter is that with the consolidation of Global HVAC & Automation, Kontrol has established an order book that’s worth in excess of $155 million over the next three years.

It’s worth taking note of that figure again:

$155 million.

Make no mistake, for a company of Kontrol’s relativelysmallsize right now, this kind of additional revenue—even if it is only partly realized—could be hugely transformative.

But there’s actually an even more exciting angle here that could see the true turnover from this acquisition exceed even this already significant potential.

You see, until now, Global HVAC has focused almost entirely on larger, one-off projects that generate substantial, but still only one-off revenues.

By the way, in case you’ve not come across the term before, HVAC refers to heating, ventilation, and air conditioning. These are the key factors that contribute to a building’s overall ‘energy consumption and health’ in energy efficiency terms.

Here’s the thing, though…

Being a more traditional, family-run business, Global HVAC has not really exploited the opportunity to provide ongoing software and services to clients that would generate ongoing, recurring revenues.

Kontrol is in the perfect position to change this, and it intends to.

By integrating its own smart software with the traditional heating, ventilation, and air conditioning services offered by Global HVAC, Kontrol could potentially turn the firm’s $155 million order book into an ongoing source of recurring revenue that could fuel huge exponential growth.

And all this for an acquisition cost of just $7 million, along with an additional vendor performance payment equal to 45% of adjusted three years cumulative earnings after tax in excess of $4.5 million.

Not only does Kontrol already have this cash on its balance sheet, but—all in—it equates to an acquisition price of just 0.25X revenues!

Everything adds up to make Kontrol an extremely attractive addition to any portfolio.

But the investment casedoesn’t even end there.

Indeed, we’ve still not even considered one of the most exciting projects the company is currently working on…

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Kontrol’s real-time air-analyzer and early viral detection technology represents yet another exciting catalyst for growth

KONTROL TECHNOLOGIES CORP. NEO:KNR OTC:KNRLF | FSE:1K8

The natural tailwind from the growing demand to make buildings smarter and more energy-efficient is one thing that will excite investors about Kontrol.

The recent acquisition of Global HVAC and the $155 million order book is undoubtedly another.

But the fact is, this organizationis also sitting on a ground-breaking piece of technology that could change the way smart buildings work and provide a whole new level of protection to people working in buildings all across North America and beyond.

It’s called BioCloud, and it is designed to to detect airborne pathogens like viruses, bacteria, and fungi.

Even without the recent coronavirus pandemic, this would be a huge deal. But now, of course, it’s bigger than ever.

In fact, the technology has already been extremely well received and its development has attracted around $2.5 million in grants from the National Research Council of Canada and the Ontario Government.

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For a closer look at the blue-sky potential presented by BioCloud, the game-changing air and viral monitoring technology developed by Kontrol Technologies, READ OUR EXCLUSIVE REPORT

And be clear, this is a technology that is actively being used now.

BioCloud is not something still waiting to be finalized…

It’s not pie-in-the-sky…

It’s already being utilized by customers like the Canadian Olympic Committee, which is using it to help safeguard Team Canada at the Tokyo Olympics.

As you’d expect, the market for real-time viral detection in the air around us is set to explode in the coming months and years, and will surely become a multi-million—if not billion-dollar—industry in itself.

So, with its BioCloud units already making waves in the industry and getting noticed, Kontrol looks set to add yet another potentially huge revenue stream to its bottom line.

The picture here is clearly a bright one, and there is no wonder the company has a good level of internal share ownership, with the team behind the scenes convinced of its future success.

Indeed, unlike so many smaller companies…

Kontrol is already using organic and acquired growth to move rapidly towards the $100 million a year revenue mark, has already established a stable of strong blue-chip clients, and has already fixed the cash flow it needs to fund blue-sky projects like BioCloud.

This all makes for a very attractive investment on a fundamental level.

So, with numerous potential catalysts on the horizon, today represents the ideal opportunity for smart investors to grab Kontrol with both hands.

Indeed, if they wait too long, they may very well find that this undiscovered gem has already entered the radar of mainstream investors…

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