Tag: Dassault Systemes

Dassault continues to acquire for growth

Ben Kolada

Contact: Ben Kolada

Continuing its search for external growth opportunities, 3-D modeling software vendor Dassault Systèmes says it is paying $205m for manufacturing software provider Apriso. The deal pushes Dassault into the manufacturing operations management software industry and provides cross-sell opportunities for both companies.

The all-cash transaction values Apriso at 4.1x last year’s sales. An Apriso press release earlier this year noted that sales growth over the past seven years exceeded 20% on a compound annual growth rate (CAGR); software revenue specifically grew at a CAGR of 31% over the same period. Last year, software represented 65% of total revenue, with services accounting for the remaining 35%. Jefferies & Company advised Apriso on its sale.

The deal is primarily a product expansion for Dassault, making manufacturing operations software available to customers that are currently using its DELMIA manufacturing and production modeling software. With Apriso, Dassault also expands its presence in a variety of industries, such as consumer goods, packaged goods, high tech, life sciences, transportation and mobility, aerospace and defense, and industrial equipment.

Beyond the sales rationale, Dassault also appears to be seeking more outlets to further its growth. We previously wrote that, although the greater European economy continues to struggle, Dassault was able to announce a pair of acquisitions in April due in part to the fact that the company is still growing total revenue. With this purchase, its fourth this year, Dassault has already tied the number of M&A moves it made in its most acquisitive year, 2011. And with a large war chest – nearly $2bn (€1.5bn) in cash and short-term investments at the end of March – Dassault has enough firepower to keep announcing expansion acquisitions.

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Dassault comfortably announces two acquisitions

Ben Kolada

Contact: Ben Kolada

Even though the European economy is still struggling and M&A is an inherently risky business, Dassault Systèmes was able to comfortably announce a pair of acquisitions today, at least partly because the company is still growing. The purchases of Archividéo and FE-DESIGN are its first purchases in nearly a year.

Archividéo is a 3-D modeling vendor based in Rennes, France. Its software is used for urban planning, and could be particularly valuable to Dassault’s operations in emerging economies such as China. It has more than 250 customers, including cities, utilities and technology companies. Karlsruhe, Germany-based FE-DESIGN, on the other hand, provides product design optimization software to more than 200 customers. The acquisition fits into Dassault’s product lifecycle management segment, which is its fastest-growing business.

Terms weren’t disclosed on either transaction, but the deals aren’t likely to significantly impact Dassault’s financials. The pair of acquired companies adds just 70 employees to Dassault’s payroll. FE-DESIGN, the larger of the two based on headcount, generated only €5m ($6.6m) in revenue in its fiscal 2012.

The acquisitions come at a time when Eastern and Western European acquirers are staying out of the M&A game. As their home markets continue to sputter economically, the number of deals announced by European buyers so far this year has dropped 16.7% compared with the year-ago period. (That is slightly more than the 15.6% decline in tech transactions so far this year across the globe.)

Dassault, however, could comfortably announce a pair of acquisitions (however small they may be) because the company is still posting revenue growth. That’s noteworthy when we consider that the stagnant European economy accounted for 44% of the company’s total sales in its first quarter. Total revenue in Q1 grew 5.7% over the year-ago period.

For more real-time information on tech M&A, follow us on Twitter @451TechMnA.

Dassault Systemes bulks up through an old friend

Brenon Daly

Contact: John Abbott

Dassault Systèmes’ $600m purchase of IBM’s CATIA product lifecycle management (PLM) sales and client support operations on Tuesday is the latest twist in a complex, 30-year relationship between the two companies. Dassault, founded in 1981, inherited the rights to CATIA, one of the first 3-D computer-aided design (CAD) packages, from its aerospace parent Avions Marcel Dassault (now Dassault Aviation). Then in 1992, Dassault bought the rights to the other pioneering CAD package, CADAM, from IBM. It set about combining the two, and continued to jointly market the product set with Big Blue.

Now it seems that Dassault wants more control over its business. Through the deal, which is expected to close during the first half of next year, it gains access to 1,000 more clients and around $700m in annual sales. The transaction is expected to boost earnings in the first year. (Dassault plans to speak more about the financial impact of the deal during its third-quarter earnings call on Thursday.)

The partnership will continue with IBM in the services role, but should enable Dassault to simplify its contracts with very large customers such as Ford Motor and Boeing, which until now had to negotiate with both vendors. The scope of CAD software has evolved over the years from core engineering and complex product design into collaborative PLM focused on business processes, workflows and the supply chain. However, Big Blue didn’t have the agreements in place to sell the full set of Dassault tools. The result was that more big firms were dealing directly with Dassault. A side effect is that both companies will be more able to work with other partners: Dassault with Hewlett-Packard, for instance, and IBM with other PLM providers such as Siemens PLM Software and PTC.

The deal is the biggest in Dassault’s history, though it has spent heavily in the past on industry consolidation, most notably through the acquisitions of MatrixOne (March 2006, $408m), ABAQUS (May 2005, $413m) and SolidWorks (June 1997, $310m). Other vendors have also been buying up big chunks of the PLM market. Siemens inked the sector’s largest deal in January 2007, spending $3.5bn on UGS, while Oracle handed over $495m for Agile Software in May 2007. The PLM shop that appears to be left behind is PTC, which despite spending more than $600m on 11 purchases of its own since 2004 is now much smaller than either Siemens or Dassault and is under pressure from moves into PLM by mainstream enterprise software houses such as Oracle and SAP. Several market sources indicated that PTC has retained Goldman Sachs to advise it on a possible sale.