A few quick thoughts while I work through the pile in the inbox:
Bentley to buy back Intergraph’s stake
The Huntsville (AL) Times on Monday published a blog post about Bentley Systems buying back the shares that had been owned by Intergraph. In the dark ages, Intergraph took a 50% stake in Bentley. Intergraph’s last annual report (for 2005) indicated that it held “an approximately 28% basic or 25% fully diluted” ownership stake at that time.
When Hexagon bought Intergraph last summer this part of Intergraph’s portfolio wasn’t mentioned in the deal, leading many to wonder whether Hexagon had acquired the shares in that deal — and now we know: no. The Huntsville Times reports that “Cobalt BSI Holding, which bought Intergraph in 2006, will sell back to Bentley its 15.6 million shares of Bentley stock, at a purchase price of just over $12 per share, totaling about $198 million, according to court documents.”
The blogosphere has speculated about Bentley’s implied valuation, the source of the funding for this share buyback and so on but appears to have overlooked a major point: for the first time in its history, Bentley will be free of Intergraph and able to address its markets as it sees fit. In plant design, in particular, the companies are fierce competitors with direct head-to-head competition between Intergraph’s CadWorx and Bentley’s AutoPlant and an emerging competitive threat between Intergraph’s PDS/SmartPlant and Bentley’s new Open Plant offering. The companies also compete in many other areas such as transportation infrastructure management. I would imagine the feeling in both Exton, PA (home of Bentley) and Huntsville (Intergraph HQ) is one of relief: now everyone can get out of the courtroom and on with the business of making software.
The Huntsville Times piece drew its information from court documents. Part of the deal appears to be that neither company will speak about the settlement.
IBM: Results bode well for PLM?
IBM reported results for the fourth quarter of 2010 yesterday that were surprisingly strong, largely because its mainframe hardware sold well. But software did well, too, and many on Wall Street are looking at this as a harbinger for results to come.
IBM’s overall software revenue was up 12% over Q4 2009 in constant currencies, an acceleration over the first three quarters of 2010: Q1 2010 software revenue was up 5%; 2Q was up 2% and 3Q was up 2%, all over the corresponding period in 2009 and in constant currencies. [The PLM revenue that was sold to Dassault Systemes was removed for this comparison.] As reported, software revenue was up 7% to $7 billion.
IBM says that most of its software segments saw this acceleration, with WebSphere up 32%, Information Management (database, business analytics) up 19% and Tivoli up 12% (all year/year in constant currencies).
From a geo perspective, revenue from the US was up 10%; France and Italy led EMEA with revenue increases in the “double digits” as overall EMEA revenue was up 4% in Q4 and Brazil/Russia/India/China (BRIC) revenue was up 17%. The overall EMEA growth in Q4 was the first in 2010, as revenue had declined 1% or 2% in each of the prior quarters.
In all, said IBM Chief Financial Officer Mark Loughridge, “We just delivered a great quarter to cap off a great year.” PLM companies start reporting next week — let’s see how they saw Q4.