Acuity to Buy Leak Detector Parameter for $675m

Acuity, the US lighting and building-technology group, has agreed to buy Parameter Technologies, which makes leak-detection and monitoring equipment for data centres, for $675m. Acuity said in its announcement on 26 October that it would fund the deal with $500m of new borrowing and the rest from cash.

The pitch is liquid cooling. As AI servers get hotter, more data centres are piping coolant directly to the chips, and Acuity describes data-centre leak detection as “a fast-growing market driven by the shift to liquid cooling”. Parameter says it provides leak detection, environmental monitoring and battery monitoring for data centres, utilities and other critical infrastructure.

In brief

Acuity is paying $675m for Parameter, owner of the RLE Technologies and CellWatch brands.
Parameter projects about $100m of sales in 2027, more than 30% growth, with EBITDA margins of about 40%.
Acuity says the deal will add to its adjusted earnings per share in fiscal 2027.
The companies give different closing dates, and US antitrust clearance is still needed.

Parameter will join Acuity’s Distech controls business

Parameter, based in Fort Collins, Colorado, was formed in December 2024 when the private equity firm May River Capital merged RLE Technologies with NDSL, the maker of Cellwatch battery monitors. According to Parameter’s own release, it has engineering and service operations in Raleigh, North Carolina, and sales and service in Milton Keynes in the UK. Neither company’s release names the seller.

Once the deal closes, Parameter will become part of Distech Controls, the building-controls arm of Acuity Intelligent Spaces, one of Acuity’s two divisions alongside its lighting business. Acuity says the two companies already share sales channels, including system integrators and distributors, and that Parameter will deepen Distech’s relationships with makers of cooling equipment.

“By combining Parameter’s sensing, detection and monitoring technology with Distech’s edge controls, we expand our capabilities in data centers and deepen relationships with channel partners,” said Peter Han, president of Acuity Intelligent Spaces. Michael Blazes, Parameter’s chief executive, said joining Acuity would let the company “bring our technology to more applications, help customers identify issues earlier and take action to better protect their operations”.

That pairing of Parameter’s sensors with Distech’s controls is the core of the deal. Data-centre operators are already adopting direct-to-chip liquid cooling, and NVIDIA’s factory-built AI data centres rely on it too.

The closing date depends on whose release you read

Acuity says the deal should close in the second quarter of its fiscal 2027. Its financial year ends in August, according to its latest annual report, which puts that quarter between December and February. Parameter’s release says “late 2026”. Both say completion depends on the waiting period under the US Hart-Scott-Rodino antitrust law. Until then, Parameter says, the two companies “will continue to operate independently”. PJT Partners and Baker McKenzie are advising Acuity, with J.P. Morgan and Bank of America leading the financing; Lincoln International and Paul Hastings are advising Parameter.

Acuity is paying about 17 times Parameter’s projected profit

The financial case rests on Parameter’s own forecasts. According to Acuity’s release, “Parameter expects to deliver sales of approximately $100 million for calendar 2027, representing growth of more than 30 percent year-over-year, and EBITDA margins of approximately 40 percent.” Neither company has published Parameter’s actual revenue.

On those projections, TSN’s arithmetic puts the price at almost seven times next year’s expected sales and about 17 times expected EBITDA, roughly $40m. More than 30% growth to $100m implies 2026 sales of under about $77m. Those are high multiples for an equipment maker, and they assume both the growth and the margins arrive on schedule.

For Acuity, the deal is small but pointed. Its Intelligent Spaces division had net sales of about $1.1bn in the year to August, up 44.8%, largely because of an earlier acquisition, according to the annual report. Parameter’s projected $100m would add close to a tenth to that, from a business tied directly to data-centre construction. Acuity is betting, as CBRE did with its £460m purchase of Onnec, that the safer way into the AI building boom is to supply the equipment and services around the chips rather than the chips themselves. The test comes when Acuity first reports Parameter’s numbers after the deal closes.