British industrial software provider Aveva Group is buying SoftBank-backed peer OSIsoft for an enterprise value of $5 billion. Aveva said on Tuesday, as it seeks to expand its services with the California-based firm’s PI system.
In a phone interview James Kidd, deputy CEO and CFO of Aveva told the deal will see Japanese tech conglomerate Softbank. It has embarked on an asset sales plan to sell its 44.7% stake in OSIsoft for more than $2 billion in cash.
Providers such as Cambridge-based Aveva are growing their businesses, as industrial companies have been incorporating more software into their manufacturing to cut costs and improve their supply chains.
Aveva said it designs a rights issue adding up to about $3.5 billion to help finance the acquisition of OSIsoft, which makes programming that catches information from ships, chemical boilers, power plants, and other facilities in industries including oil and gas, mining, pulp and paper, and water.
Aviva’s CEO Craig Hayman said that “The procurement of OSIsoft will quicken the Enlarged Group’s job in the digitization of the industrial world. It is being driven by a requirement for sustainability, industrial internet of things, Cloud, data visualization, and artificial intelligence”.
Aveva said that it depicted OSIsoft’s PI framework, which gathers, analyses, and shares data from multiple sources. It does so as “one of the foremost desired organizations within the industrial sector”. It will be set up as a specialty unit of the amplified organization.
Aveva’s last major deal was three years ago when France’s Schneider Electric took a 60% stake within the company. Aveva said Schneider Electric has committed to choose favor of the OSIsoft deal and participate within the rights offering.
Rights issue
The British company said it might fund the acquisition employing a combination of rights issues. Cash after all sheet and new debt, also as issue shares to at least one of Osisoft’s shareholders, Estudillo. The deal is expected to close at the end of the year.
Aveva’s profit rises by 22% in the year to 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 this financial year would be hit by the global economic downturn the share price fell.
Aveva said the newly established role of chairman emeritus will be appointed to Osisoft’s founder and CEO J. Patrick Kennedy. Kennedy’s Estudillo has a 50.3% stake in OSIsoft. While SoftBank holds 44.7% and the remaining is held by Mitsui & Company. Mitsui said it’ll sell its interest in OSIsoft for $250 million. Lazard is the only sole financial adviser to Aveva.
