DEAL DESK: Carrier's busy week

Carrier made a few deals in short succession. We unpack it all here.

• The firm acquired partner 75F

• A few days later the firm sold Noresco to Opterra (which was formed out of the acquisition of some of Engie’s US operations)

• A few days later, Carrier reported quarterly earnings which shed light on the 75F acquisition, but notably, shared very little about the Noresco sale

The Noresco move is non-consensus, but fits in with some performance contracting trends, while 75F was already white-labeled as Carrier ClimaVision. Carrier previously acquired EcoEnergy Insights a few years ago (now part of Abound) and has one of the largest light commercial HVAC businesses (rooftop units). This all fits in with an integrated light commercial solution, supporting customers across the entire operational lifecycle.

In addition to a full summary of all of these developments, our analysis highlights what this means to the market, and unpacks our initial thoughts of what drives M+A among the OEMs (it’s not what you think).

• The Catalyst: Carrier bought partner 75F and sold Noresco to LS Power-backed Opterra, marking a bigger move into controls and a diminished focus on peripheral energy services.

• The Market Impact: This marks yet another larger OEM buying a smaller innovative technology firm. We compare the key deals below, but 2026 has been more active than we expected.

• The Premium Verdict: The trend this reinforces is more significant than the specific deal itself. A new competitive map is emerging - something we speculated about back in 2024, when first releasing our capital efficiency analysis. With fewer homes for smart building tech innovators and continued difficulty raising money from VC/PE firms, the smaller and mid-sized innovators may want to start considering the strategic options for their businesses.

There is already a lot of engagement and familiarity between 75F and Carrier. It’s not surprising that that Carrier ended up buying the business: Carrier has a front row seat into how 75F operates and already sells the solution through its channels.

This also fits with a topic we shared in the newsletter a year or two ago, when we wrote about companies that are aligning their controls and HVAC businesses. Specifically for light commercial HVAC (e.g., rooftop units), there is an opportunity to bundle controls and connected thermostats. Carrier’s acquisition is another example of this trend at work.

The other big news: Carrier is selling the Noresco ESCO (performance contracting) business. In fact, it was announced and then closed within about a week. Despite being a scaled business in a fairly known and mature industry, there was very little fanfare or explanation, but we’ll share our take on what Carrier was thinking. Opterra, an old business that is back to operating under the legacy name, made the acquisition. LS Power acquired Opterra last year from Engie. We wrote about that earlier in the year, when Engie sold the “Impact” business to Arcadia.

Noresco was acquired by Carrier about 20 years ago, and is a fairly standard ESCO (energy service company or performance contractor). We did not anticipate this divestment given that, typically, this business model enables an HVAC company to gain multi-decade relationships with clients and creates a new channel to sell equipment. The energy savings finances the equipment upgrades, making HVAC and controls a “zero capex” decision while still delivering capital improvements.

In this Deal Desk analysis, we will cover: UPDATE

• What 75F offers and how it compares to peers

• How this acquisition compares to the other relevant and recent OEM moves

• Why Carrier may have sold Noresco, and some of the subtle shits in the ESCO market

• How OEMs appear to think about M+A of smart buildings innovators

• What other startups and innovators should be doing now

Let’s go back to 75F. The company has been around for over 10 years, and it grew as a next-generation wireless controls platform. They offer hardware, software, and started growing and becoming a much more household name around the pandemic, especially as they were able to offer what they call ‘epidemic mode’ for buildings. Their go-to-market was typically through controls integrators, which makes sense here in America because it is the primary way to sell hardware-based controls. But in recent years, 75F became more focused on OEM relationships, Carrier being the best example. But, Siemens also invested in 75F and the firm partnered with Daikin in 2021.

75F has also moved away from having a fairly closed product to offering their own Tridium JACE, which has become a bit of a requirement to succeed in control these days. Notably, Carrier has been less Tridium-centric than most of its OEM peers.