After two attempts over the past few years to acquire UK-based software provider Aveva Group plc failed to take, Schneider Electric SE, Rueil Malmaison, France, said it has an agreement with Aveva’s board to combine Aveva with Schneider Electric’s industrial software business to create a new global player in engineering and industrial software. If approved by shareholders, Schneider will own 60% of the new venture and Aveva shareholders will hold 40%.
The combined entity will be a global player in engineering and industrial software, with scale and relevance in key markets as well as an extensive technology portfolio and combined revenues of around £657.5 million ($859 million) and estimated EBITDA of £145.8 million ($190.7 million) for the financial year ended March 31, 2017.
The companies’ combined product portfolio will offer a solutions covering all aspects of digital asset management from process simulation to design, construction and manufacturing operations management and optimization, Schneider said in a release.
The combination will create an Enlarged Aveva Group positioned for further merger and acquisition opportunities to build on its scale and comprehensive industry and lifecycle solution coverage. Schneider said the transaction will enhance the value of its industrial IOT platform called EcoStruxure while unlocking the potential for revenue and cost synergies, leveraging complementary end-markets and geographical coverage as well as customers and product portfolios.
“The combined portfolio will cover process simulation to design and construction to manufacturing operations/ optimization,” said analyst Jeff Sprague of Vertical Research Partners, in a research note. “Aveva is very strong in the front end design and engineering work while [Schneider] is strong in O&M and asset optimization.”
