mCloud Technologies Corp. (TSXV:MCLD) (OTCQB:MCLDF) is a leading provider of asset management solutions, combining IoT, artificial intelligence, cloud computing, and analytics. Today, mCloud announced that it has signed a deal to acquire technologies from AirFusion, Inc, an AI visual inspection and monitoring technology provider based in Boston. Also being acquired from AirFusion are its subsidiary AirFusion GmbH, existing customer contacts, and technologies under development.
AirFusion’s Newton Engine to be Integrated into AssetCare
AirFusion designs the Newton Engine, which utilizes patent-pending AI technology to identify and classify damage from images of wind turbine blades, and will be integrated into mCloud’s flagship AssetCare platform, which offers asset management solutions across the energy sector. Early deployments began last year, and mCloud now expects to see full production for AssetCare wind customers in Q1 2020. The company plans to integrate the Newton Engine to deliver new AssetCare solutions beyond just wind customers to all areas of its business throughout 2020.
Dave Weinerth, mCloud’s President of Smart Energy, described AirFusion’s AI-derived results from wind turbine blade images as “the best we have seen, reducing processing times by over 90% without compromising high accuracy,” adding that the deal gives mCloud Technologies “a serious competitive edge over other wind blade inspection providers.” mCloud expects to convert up to C$1.2 million in current AirFusion engagements into recurring revenue customers for AssetCloud.
“For wind farm operators, the combination of mCloud’s asset performance management with the AirFusion AI-driven technologies that digest and analyze blade damage images, enables the optimal production of wind energy,” said Edward Mier-Jedrzejowicz, AirFusion’s CEO. The deal will also bring AssetCare’s technology to major wind operators and OEMs in continental Europe, with plans to expand the blade-inspection technology to global markets, including China and North America, in Q1 2020.
The deal is a tuck-in acquisition, meaning AirFusion will become a smaller division of mCloud Technologies. The full purchase consideration for AirFusion’s assets has not been disclosed; however, the shares being granted as part of the transaction are 200,000 at close and 200,000 within 12 months, depending on certain performance milestones being met.
mCloud Continues to Expand
News of this deal comes hot on the heels of mCloud’s acquisition of Atlanta-based 3D technology firm Construction Systems Associates Inc (CSA), which was announced in January. The CSA deal will advance mCloud’s status as one of the largest providers of 3D asset management capabilities in the nuclear power industry in North America, with over 80% of all nuclear power plants in the US currently relying on CSA’s technology to facilitate certain plant operations, including clients such as Dominion Energy (NYSE:D) and Japanese heavyweight Toshiba (OTCPK:TOSBF).
Continuing its ambitious pursuit of international expansion, mCloud Technologies said it plans to utilize capabilities added to its AssetCare platform by CSA to complete its first 3D Digital Twin engagements with customers in North America, the Middle East, and Southeast Asia before the end of Q2 2020. The combination of CSA’s expertise in delivering accurate 3D asset models to the nuclear power industry and mCloud’s AI-powered capabilities through AssetCare will allow the company to achieve a new level of accuracy for numerous asset management capabilities.
It certainly looks like a busy few months ahead for mCloud Technologies, following a robust start to the year. In 2020, the company expects to exceed 40,000 connected assets, while it also anticipates revenue to be somewhere between C$70 million and C$80 million, with at least 50% of that revenue coming from high-margin AssetCare contracts.
At the time of writing, mCloud shares have rocketed up 7.6% following news of the AirFusion deal. These gains are indicative of an impressive 12-month run, which has seen mCloud stock gain over 80% following a host of strong deals that have set the firm apart as a potential game-changer in the asset management sector.
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