AVEVA and Schneider Software to create a global leader in industrial software


21-07-2015

“Bravo Aveva!” says Claire Ruskin, CEO of Cambridge Network, on yesterday's (Monday's) announcement that Aveva Group PLC is to acquire the industrial software assets of Schneider Electric.

 

She comments: “Cambridge business leaders at Aveva have shown again that Cambridge has world-class commercial leadership, practised here in businesses that have scaled up locally from start-up to $billions.  Taking over one of the big French industrial names, Schneider Electric, will give even greater global profile.  When Richard Longdon spoke at a Cambridge Network lecture,  we heard that he had ambitious plans. 

"To keep thriving businesses like Aveva at the core of Cambridge technology employment, we need to pay attention to simple things like keeping the traffic flowing.  We need smart thinking to help make our region smarter in the practical ways. 

"At a City Deal workshop on congestion tomorrow evening I’ll be trying to work out how we can learn from the smart solutions we create in much harder disciplines like oil and gas.” 

 

Yesterday's anouncement:

AVEVA and Schneider Software to create a global leader in industrial software

AVEVA Group PLC, one of the world's leading providers of engineering design and information management solutions, and Schneider Electric SE announce that they have reached a non-binding agreement on the key terms and conditions of an acquisition of selected Schneider Electric industrial software assets (including, among others, the former Invensys software assets) by AVEVA.

Schneider Software's product portfolio offers solutions in Process Engineering & Optimisation, Operations Planning & Scheduling, Operations Execution Management, Asset Management, Operations Control and Information Management.

AVEVA will acquire Schneider Software on a debt-free cash-free basis and receive from Schneider Electric upon completion £550 million for consideration of new AVEVA shares to be issued to Schneider Electric, such that Schneider Electric will own 53.5% of the Enlarged AVEVA Group's fully diluted share capital immediately post completion. Based on the current AVEVA share price, the c. 74.0 million AVEVA shares to be issued to Schneider Electric as part of the Transaction have a current market value of c. £1.3 billion. The cash payment from Schneider Electric will be distributed upon completion to AVEVA's shareholders (excluding Schneider Electric).

Given the relative size of Schneider Software and AVEVA, the Transaction will be classified as a reverse takeover of AVEVA under the Listing Rules of the UK Listing Authority (the UKLA). Certain information on Schneider Software has been provided by Schneider Electric and is included in the Additional Information section of this announcement.

Strategic rationale and other benefits of the Transaction

The Directors of AVEVA and Schneider Electric believe that there is a clear and compelling industrial logic and strategic rationale for a combination of AVEVA and Schneider Software (forming, the Enlarged AVEVA Group). The Transaction will, among other things:

  • Create a global leader in industrial software, with scale and relevance in key-markets and a best in class technology portfolio with combined revenues and Adjusted EBITA of c. £534 million and c. £130 million, respectively;
  • Provide a comprehensive integrated offering through its combined product portfolio - including among others Schneider Electric's SimSciTM, WonderwareTM and AvantisTM solutions alongside AVEVA PDMSTM, AVEVA Everything3DTM and AVEVA NETTM - creating a holistic and more visible value proposition enabling the Enlarged AVEVA Group to better navigate specific cycles by covering all aspects of the Digital Asset lifecycle through Process Simulation, detailed 3D Design, Asset Data Management, Operations Management and Asset Performance Management for large, complex engineering projects in the process and plant industries;
  • Diversify AVEVA's end-markets, enhancing its position in Oil & Gas, Power and Marine while adding leading positions in other verticals including Chemicals, Food and Beverage, Mining, Water and Waste Water, and Pharmaceuticals thereby substantially enlarging the total addressable market;
  • Improve geographic and end market coverage, with AVEVA benefitting from Schneider Software's exposure to the Americas market (the Americas will contribute approximately 36% of revenues in the Enlarged AVEVA Group versus 18% of AVEVA's revenues today);
  • Create additional value for shareholders through the potential for material revenue and cost synergies;
  • Provide an exciting commercial opportunity for the Enlarged AVEVA Group to leverage Schneider Electric's multiple go-to-market channels;
  • Position the Enlarged AVEVA Group as a strong player best able to continue to take advantage of future M&A opportunities;
  • Create a compelling equity story, underpinned both by an enhanced strategic positioning and a strengthened financial profile for the Enlarged AVEVA Group; and
  • Establish a "best-in-class" management team and increased brand profile for attracting further talent.


Commenting on the Transaction, Richard Longdon, Chief Executive Officer of AVEVA said:  "The transaction will be transformational to AVEVA, creating a global leader in industrial software, which will be able to better compete on a global scale. Through the acquisition of Schneider Software, AVEVA will significantly expand its scale and product portfolio, diversify its end user markets and increase its geographic exposure to the US market, in line with our strategic goals.

The transaction is expected to provide significant value to our shareholders via the upfront cash payment and a share of the Enlarged AVEVA Group to benefit from synergies and a compelling equity story underpinned by an enhanced strategic positioning."

Commenting on the Transaction, Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric said: "Working on a combination of AVEVA and selected Schneider Electric industrial software assets represents a promising opportunity for the stakeholders of both companies. The combination will create a global leader in industrial software, with a unique portfolio of asset management solutions from design & build to operations and will address customers' requirements along the full asset life cycle in key industrial and infrastructure markets. It will also create the right environment for the software teams to develop aggressively their business, while benefiting from the multiple commercial access of Schneider around the world.

We believe that through increased scale, complementary footprint and joint R&D capabilities, the transaction will generate synergies that will benefit customers and shareholders alike."

Read the full announcement here




Other

Once legally binding documentation has been executed, completion of the Transaction is likely to be conditional on, inter alia, any consultation procedures involving the personnel's representative bodies, as well as the approval of AVEVA's shareholders and any regulatory and anti-trust approvals required.

There can be no certainty that the discussions between AVEVA and Schneider Electric will lead to a transaction, nor what the final terms or timing of any such transaction may be.

Under Listing Rule 5, certain information regarding Schneider Software is required to be provided to ensure that there is sufficient information available to the public with regard to the Transaction in order to avoid a suspension of AVEVA's shares. The information required under this Listing Rule has been provided by Schneider Electric and included in the Additional Information section of this announcement. The Board of AVEVA considers that this announcement and Additional Information section of this announcement contains sufficient information about Schneider Software to provide a properly informed basis for assessing Schneider Software's financial position. Furthermore, the Board of AVEVA confirms that AVEVA has made the necessary arrangements with Schneider Electric to enable AVEVA to keep the market informed without delay of any developments concerning Schneider Software that would be required to be released were Schneider Software part of AVEVA.

The Board of AVEVA also confirms that until such time as a prospectus is published in relation to the Transaction or discussions between the parties are terminated (or such other date as required by the UKLA), AVEVA will make any announcement that would be required in order to be compliant with its obligation under the Disclosure and Transparency Rules of the Financial Conduct Authority on developments in relation to Schneider Software as if Schneider Software were already part of AVEVA.

A further announcement will be made as and when appropriate.

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For further information please contact:

AVEVA Group PLC

Richard Longdon (Chief Executive Officer)
James Kidd (Chief Financial Officer)
Derek Brown (Head of Investor Relations)
+44 1223 556655

Lazard (Financial Adviser)
Cyrus Kapadia
Richard Hoyle
Olivier Christnacht
+44 20 7187 2000

Numis (Corporate Broker and Sponsor)
Simon Willis
Rupert Krefting
Jamie Lillywhite
+44 20 7260 1000

Hudson Sandler (Financial PR)
Andrew Hayes
Wendy Baker
Alex Brennan
+44 20 7796 4133

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To read more information, click here.

AVEVA is a global leader in engineering and industrial software driving digital transformation across the entire asset and operational life cycle of capital-intensive industries.

AVEVA