Dassault continues to acquire for growth

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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A little leads to a lot as Citi buys Ness

Contact: Brenon Daly

More than three years after buying a small stake in Ness Technologies from a fellow buyout shop, Citi Venture Capital International (CVCI) has offered some $307m in cash for all of the IT services vendor. The private equity arm of Citigroup initially picked up a 9.6% stake in Ness in early 2008 from Warburg Pincus, which funded the Israeli firm in 1999. Ness put some of that money to work in M&A, acquiring a dozen (mostly small) companies over the past decade.

Ness had been out of the market for the past year, however, as it was put in play by an unsolicited bid. (Jefferies & Company advised Ness on the sales process, along with the company’s longtime adviser Bank of America Merrill Lynch. Merrill was co-underwriter on Ness’ 2004 IPO.) We understand that Ness had attracted a fair amount of interest over two rounds of bidding, including a look from Vector Capital. CVCI’s offer of $7.75 per share represents the highest price for Ness stock since October 2008. (Interestingly, terms include a ‘no shop’ provision and a breakup fee of $8.35m, or a standard 2.7% of deal value.) CVCI expects to close the transaction within a half-year.