This week’s announcement about AVEVA and Schneider Electric combining forces to create a global leader in engineering and industrial software points to a substantial shift in the marketplace. As a result of what is being characterized as a “transformative transaction” (the “Combination”), AVEVA (Cambridge, UK) and Schneider Electric Software (Lake Forest, CA) are both expected to add significant scale and relevance in key markets, as well as geographic and end-market diversification.
Terms of the deal call for the Schneider Electric Software Business to take a 60% stake in a new entity known as the “Enlarged AVEVA Group.” This arrangement is said to offer a number of important benefits for the two parties, including, but not limited to, the ability to:
- provide a comprehensive combined product portfolio – including among others Schneider Electric’s broad based industrial software portfolio comprising the SimSci, Wonderware, Avantis, Citect, ClearScada, and ePLMS product families, alongside AVEVA PDMS, AVEVA Everything3D, and AVEVA NET– offering a substantial set of end-to-end solutions covering all aspects of digital asset management from process simulation to design, construction, and manufacturing-operations management and optimization;
- diversify and broaden the Enlarged AVEVA Group’s end-markets, enhancing its position in Oil & Gas, Power and Marine while adding leading positions in other verticals including Chemicals, Food and Beverage, Pharmaceuticals, Mining, Water and Waste Water, and Critical Infrastructure, thereby substantially enlarging the total addressable market;
- improve geographic and end-market coverage, with AVEVA benefitting from the Schneider Electric Software Business’ exposure to the North American market;
- increase penetration into the owner/operator segment, leveraging Schneider Electric Software Business’ capabilities and access, further reducing AVEVA’s exposure to capital-investment-cycles expenditure.
Completion of the transaction is expected to be at or around the end of 2017, subject to several conditions, including, among others, obtaining applicable regulatory anti-trust, and AVEVA-shareholder approvals. Headquarters of the Enlarged AVEVA Group will remain in Cambridge, and the company will continue to listed on the London Stock Exchange.
Although the two parties involved in the Enlarged AVEVA Group are in the process of selecting a new chief executive officer with a proven track record and experience in running a global software business, AVEVA’s James Kidd will continue in that role for now. Upon the appointment of a new chief executive officer, it’s intended that Kidd will become deputy chief executive officer and chief financial officer. At that time, David Ward, who currently serves as chief financial officer, is expected to step down from the Board and be appointed to the role of Company secretary.
Other key members of AVEVA’s existing executive team will also be involved in managing the new entity, specifically Dave Wheeldon, chief technology officer, who also currently serves as deputy chief executive officer; and Steen Lomholt-Thomsen, chief revenue officer. Both are expected to remain in place following completion of the transaction.
Ravi Gopinath, who is currently executive vice president of the Schneider Electric Software business, will be appointed as chief operating officer of the Enlarged AVEVA Group, reporting to the organization’s chief executive officer.
About Schneider Electric Software
Schneider Electric Software is a major player in markets and technology areas adjacent to those of AVEVA. Its portfolio addresses business processes across the customer value chain, providing products and services that enable end users to maximize the value of their manufacturing operations and supply chains across a broad range of capital-intensive industries. Its global footprint spans North America, Europe, the Middle East, Asia Pacific and Latin America with approximately 2,700 employees worldwide (including approximately 158 temporary employees and contractors). It has eight global research and development centers and 25 project-execution centers.
AVEVA supplies mission-critical solutions to some of the world’s biggest engineering contractors (EPCs) and Owner Operators. Its technology was developed and spun out of Cambridge University in 1967. In 1976, the company introduced the world’s first 3D plant design system (PDMS) with an object-based engineering database. While the principle driver of AVEVA’s growth has been the Oil & Gas sector, the company also maintains strong positions in the global Power market and Marine industry. It also serves new growth markets and other related industries, including Food & Beverage, Chemicals, Pharmaceuticals, Metals & Mining, and Pulp & Paper. The company currently maintains offices in 30 countries, offering local support wherever its customers operate.
For More Information
For additional details on the AVEVA/Schneider Electric transaction, CLICK HERE to listen to a replay of the companies’ joint webcast of Sept. 5, 2017.
To learn more about AVEVA’s portfolio, CLICK HERE.
To learn more about Schneider Electric Software’s portfolio, CLICK HERE.