Kontrol Technologies enters non-binding LOI to acquire HVAC service business

Kontrol Technologies (KNRLF) is expanding its solutions in the Multi-Residential Building sector and as part of its ongoing mergers and acquisition strategy has entered into a non-binding Letter of Intent to acquire an Ontario-based HVAC service business. Over the past twelve months, the Company has been focused on expanding its building footprint in the multi-residential market, with a particular emphasis on complex heating and cooling retrofits in aging buildings. This strategy combines a transition to energy-efficient solutions, the leveraging of applicable rebates for energy efficiency upgrades, and the establishment of long-term preventative maintenance agreements. The Company is now quoting larger-scale opportunities as part of its organic growth plans. Ontario’s multi-residential sector represents a significant addressable market. According to the Urbanation-FRPO Ontario Rental Market Study Update, the province’s purpose-built rental apartment universe reached 707,853 units in 2024, with approximately 87% of Greater Toronto Area rental stock constructed prior to 1980. This aging building inventory creates substantial demand for heating and cooling system modernization – a market the Company is well positioned to serve. Kontrol continues to be focused on growing both organically and through acquisition. The Company has entered into a non-binding LOI with a potential acquisition of an Ontario-based HVAC service company. The LOI is expressly non-binding and does not obligate either party to complete a transaction. There can be no assurance that the potential acquisition will be completed on the terms described herein, or at all. The target company generates approximately $3M in annual revenue with normalized EBITDA margin of approximately 12%. The acquisition price is $1.2M which includes approximately $400K in working capital. Upon closing, if completed, Kontrol intends to focus on business synergies to expand commercial services opportunities through enhanced commercial maintenance and service agreements. The potential acquisition is expected to complement Kontrol’s existing capabilities. The LOI is subject to customary conditions, including the satisfactory completion of due diligence, the negotiation and execution of a definitive purchase agreement acceptable to both parties, and any required regulatory approvals. The execution of the LOI does not create any binding obligation on either party to complete the proposed transaction, and either party may terminate discussions at any time and for any reason prior to the execution of definitive agreements.