Quickie: Yokogawa closes KBC acquisition

Apr 13, 2016 | Hot Topics

Back in February, Yokogawa outbid AspenTech for KBC, the UK software developer and consultancy focused on operational optimization for the oil and gas industry. The deal needed to be approved by UK regulators, which happened on April 5, and on April 7 both boards of directors said that the scheme (the mechanism for the deal) was now in effect.

On Friday, Yokawaga introduced KBC as a member company of the Yokogawa Group and laid out its rationale for the deal. As a reminder. KBC software and consultants work across the upstream (oil production) and downstream (refineries and petrochemical) segments. KBC offers process optimization and simulation software, and consulting services; Yokogawa makes the control systems, field instruments (measuring temperature, flow, pressure, and other characteristics) used in many of these same facilities.

Yokogawa says KBC will “strengthen its position as an eminent player in the industrial automation sector by being able to provide a unique range of services and robust product portfolio, including consulting, packaged software, control systems, and sensors” — making Yokogawa “a one-stop [solution provider] from client senior management on down to field operators, mainly in the oil and gas industry.”

I didn’t know this, but Yokogawa has a “Transformation 2017” plan, under which the company works with its customers to develop products and services to optimize customers’ asset operations. Yokogawa says that adding KBC’s software to Yokogawa’s measurement, control, and information technologies will “create new value [so that we] become the global leading company in the advanced solutions field … Yokogawa will provide new value to its clients as quickly as possible to maximize the positive effects of this integration.”

KBC CEO Andrew Howell expressed delight at the completion of the deal and says his team is excited about the future. “Yokogawa recognises the strength of KBC’s technology, consultants and leadership and will invest in KBC’s future success. Whilst we are coming together with Yokogawa as a wholly-owned subsidiary, Yokogawa admires and recognises the strength of the KBC brand and will maintain and invest in it. All current contractual obligations between KBC or its subsidiaries and clients and partners and other third parties will continue to be honoured, with no change to terms and conditions for contracted and ongoing product and / or service obligations … With Yokogawa we are able to accelerate our strategy which is centred on making our clients world-class in terms of operational excellence and profitability.

It’s an interesting combination and bolsters the trend of traditional hardware companies that seek out software solutions for its higher margins and more strategic impact on their customers’ operations. Let’s see what sort of one-stop offers this new combo can create.

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