Schneider, Aveva Merge Industrial-Software Work -- WSJ
06 Settembre 2017 - 09:02AM
Dow Jones News
France's Schneider to roll assets into Aveva in exchange for 60%
of combined company
By Ben Dummett and Nick Kostov
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 6, 2017).
Schneider Electric SE of France has agreed to take control of
British engineering software provider Aveva Group PLC, the latest
move by an industrial giant toward writing the software that will
run the factories and machines of the future.
Under the deal, announced jointly on Tuesday, Schneider will
fold its software assets into Aveva's operations and pay the U.K.
company more than GBP550 million ($710 million) in exchange for a
60% stake in the combined entity, in a so-called reverse takeover.
Aveva would also distribute GBP100 million to shareholders
following the deal's completion.
Fearing disruption from tech startups and Silicon Valley giants,
the companies are combining their software operations to add heft
as manufacturing adopts more automation. Other companies, including
General Electric Co. and Robert Bosch GmbH, have been working on
digitizing their manufacturing processes, and developing software
platforms and automation tools to sell to other industrial
players.
Schneider targeted U.K. software companies in the past to
bolster its industrial-software business. In 2013, it agreed to
acquire Invensys PLC for GBP3.31 billion to better compete against
rivals such as Siemens AG, Mitsubishi Electric Corp. and Rockwell
Automation Inc.
The latest combination offers opportunities to cut costs and
access new customers. "Through increased scale and complementary
footprint the transaction will generate synergies that will benefit
customers and shareholders alike," said Jean-Pascal Tricoire,
Schneider's chief executive.
The planned transaction is similar to the structure of an
attempt by the companies to merge their industrial-software
businesses in July 2015. Then, Schneider had agreed to combine its
software assets with those of Aveva and pay GBP550 million in
exchange for a 53.5% stake in the enlarged group. However, the deal
collapsed after the two sides couldn't agree on final terms.
Spun out of the University of Cambridge in 1967, Aveva provides
engineering software to owners, operators and engineering
contractors that operate in the power, oil-and-gas, marine and
paper and pulp sectors, among others. It employs more than 1,700
people across 30 countries.
The deal comes at a time Aveva is trying to reduce it reliance
on the slowing oil-and-gas and marine markets. For the year ended
March 31, Aveva boosted revenue by 7% to GBP215.8 million from the
prior year, benefiting in part from currency moves. Discounting
that, revenue was down 3.8%.
Schneider's software is used to help manage manufacturing
processes, design tools, and train plant crews. It services
industries ranging from transportation to its largest market of
food and beverages and pharmaceuticals, which generates about 16%
of the company's annual software revenue.
The combination will give Aveva greater access to the U.S.
market, where Schneider's software business generates almost half
of its annual sales. Aveva generates the bulk of its revenue in
Europe, the Middle East and Asia.
"Aveva will significantly expand its scale and product
portfolio, increase its capabilities in the owner operator market,
diversify its end user markets and increase its geographic exposure
to the North American market," said Aveva Chairman Philip
Aiken.
Aveva would maintain its listing on the London Stock Exchange
and remain headquartered in Cambridge, U.K.
Aveva's lead adviser on the deal is Lazard. Numis is also
advising the British company. Morgan Stanley is advising
Schneider.
Write to Ben Dummett at ben.dummett@wsj.com and Nick Kostov at
Nick.Kostov@wsj.com
(END) Dow Jones Newswires
September 06, 2017 02:47 ET (06:47 GMT)
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