Aveva Buying OSIsoft for $5 billion to boost industrial software business

British industrial software leader Aveva is buying Softbank-backed OSIsoft for $5 billion. The deal would further consolidate digital transformation in the industrial software industry.



PUBLISHED BY
Christy Gren



TAGS:


11 months ago




Aveva Group Plc. announced on Tuesday it has agreed to buy OSIsoft for $5 billion in a mostly cash deal to fortify its position in industrial software. The British software company is buying US rival that is 54% held by its founder and CEO J. Patrick Kennedy’s family and 45% held by Softbank’s Vision Fund to create a company with revenue of $1.57 billion and Adjusted EBIT of around $432 million, or a 28% margin.

About $4.4 billion of the deal will be paid in cash, funded by the balance sheet and a $3.5 billion rights issue.

Aveva Group and OSIsoft will combine their product offerings, bringing together industrial software and data management to empower customers in industrial and essential organizations to accelerate their digital transformational strategies.

The deal is expected to close at the end of the year.

Aveva Group OSIsoft Industrial Software

The deal taps into industrial companies’ shift towards software-based automation that helps factories run more flexibly, efficiently and sustainably.

Digital Transformation in the Industrial Sector

A 2018 paper “Get With the Program: Software-driven Innovation in Traditional Manufacturing” by Lee G. Bransetter and Namho Kwan (Carnegie Melon University), and Matej Drev (Georgia Institute of Technology), has noted the increasing prevalence of software in traditional industrial companies to develop and innovate products. The importance of industrial software has been measured by the uptick in patents citing software-based innovation. In the US, for instance, the number of software patents has increased threefold over a 20-year period, from only 5% of all patents in the 80s to around 15% in 2005.

The deal taps into industrial companies’ shift towards software-based automation that helps factories run more flexibly, efficiently and sustainably.

It’s about time industry leaders in industrial software leveraged remunerative opportunities offered by the lasting software boom.

An increasing number of British companies are tapping into equity markets in droves to bolster cash balances depleted by the coronavirus epidemic. Many have taken to increasing their rising stock prices for expansion.

Aveva Group Buying OSIsoft

OSIsoft, founded in 1980 and based in San Leandro, California, makes data-management tools that capture data from ships, power plants, chemical boilers and other facilities in industries including oil and gas, pulp and paper, mining, and water. Its PI System helps customers identify areas for cost-cutting, extend the life of their equipment and expand production capacity.

Aveva’s pretax profile rose 22% on an adjusted basis in the financial year that ended in March but its share price fell 5.5% this year by Monday’s close after it warned in April that its performance in the first half of the year would be affected by the global pandemic.

Lazard was the sole financial adviser to Aveva.

Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

Nokia to launch T20 tablet with 10.36 inch display

Nokia to launch T20 tablet with 10.36 inch display

The Nokia T20 will sport a 10.36-inch display and will have 4 GB RAM along with 64 gigs of native storage.
1 hour ago
Ford sees surprise Q2 profit despite chip shortage and manufacturing hassles

Ford sees surprise Q2 profit despite chip shortage and manufacturing hassles

“The business is ‘spring loaded’ for a rebound when semiconductor supplies stabilize and more closely match demand.”
8 hours ago
Audi A6 E-tron Production Launch in 2023

Audi A6 E-tron Production Launch in 2023

Audi has confirmed that there will be multiple variants of the etron, including “basic versions optimized for minimum consumption and maximum range.
1 day ago
Royal Dutch Shell buyback lifts investor sentiment

Royal Dutch Shell buyback lifts investor sentiment

Royal Dutch Shell commences share buybacks before the end of this year while reducing its first quarter dividend to 16 cents per share, a 66% cut.
1 day ago
Citizens Financial to acquire Investors Bancorp in $3.5 billion NYC push

Citizens Financial to acquire Investors Bancorp in $3.5 billion NYC push

Citizens Financial Group, Inc. and Investors Bancorp announced today that they have entered into a definitive agreement and plan of merger in a cash-and-stock deal worth $3.5 billi
2 days ago
Apple Q3 Earnings Break Records Again!

Apple Q3 Earnings Break Records Again!

Apple Q3 earnings prove the Cupertino giant remains unaffected by the Covid-19 pandemic as sales rise across all product lines.
2 days ago