25th Aug 2020 08:33
(Alliance News) - Aveva Group PLC on Tuesday said it has signed an agreement to acquire Softbank Group Corp-backed data management software firm OSIsoft LLC for USD5.0 billion.
San Leandro, California-based OSIsoft's PI System is a system of record for customers for data capture, storage, analysis and sharing of real-time industrial sensor-based data, Aveva explained, adding that through the system, customers are able to draw insights, optimise operations and drive digital transformation.
Earlier in August, Aveva, a Cambridge-headquartered engineering & industrial software firm, confirmed it was in talks with OSIsoft over the acquisition.
On Tuesday, Aveva said it expects the acquisition to strengthen its position as a global leader in industrial software, with combined revenue of around GBP1.2 billion and adjusted earnings before interest, tax of around GBP330 million for the enlarged group.
It added it expects the acquisition of OSIsoft to strengthen its position in the power & utilities and chemicals & petrochemicals segments and create cross-selling opportunities across the Americas, EMEA and Asia Pacific.
In the twelve months ended June 30, 2020, OSIsoft had revenue of USD488.5 million and adjusted earnings before interest, tax of USD152.2 million.
The acquisition is expected to be earnings accretive in Aveva's financial year ending March 31, 2022, before synergies. It is expected to complete around the end of 2020.
The USD5.0 billion purchase will be funded by a combination of a capital raise by way of a rights issue of new shares, cash on balance sheet and new debt facilities, as well as the issue of USD600 million worth of shares to the OSIsoft vendors.
Around 88%, or USD4.4 billion of the total consideration will be paid in cash, which will be funded by a combination of USD3.5 billion from the proceeds of the proposed rights issue and USD900 million from existing cash on balance sheet and new debt facilities.
AVEVA said it will hold a general meeting to approve the transaction and terms of the rights issue.
OSIsoft Founder Patrick Kennedy will remain involved in the business through his appointment to the newly-established non-board role of chair emeritus and ongoing share ownership of under 4% in the enlarged group.
"The acquisition of OSIsoft is perfectly in line with our strategic vision and it will accelerate the enlarged group's role in the digitisation of the industrial world, which is being driven by a need for sustainability, the industrial internet of things, Cloud, data visualisation and artificial intelligence. The acquisition will enable A to broaden and deepen its relationships with existing and new customers and bring a more comprehensive product portfolio to market," said Aveva Chief Executive Craig Hayman.
Separately, Aveva said that despite Covid-19 related disruption, demand for its products in the first four months of financial 2021 has been "robust" with particularly good demand for cloud solutions.
It said it has seen continued strong growth in subscription revenue, while maintenance revenue was broadly flat and perpetual licences and services reduced substantially.
"As previously outlined, Aveva faces a tough comparative period in the first half of 2021, particularly in Asia Pacific, partly due to the early renewal of a large contract in the prior financial year. The order pipeline for the remainder of the financial year is solid and is expected to benefit from large contract renewals in the second half of the financial year," the company said.
Shares in Aveva were trading 1.5% higher at 4,396.00 pence each on Tuesday morning in London, giving it a market capitalisation of GBP7.10 billion.
By Ife Taiwo; [email protected]
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