First day back from a lot of travel –ask me about Vienna, the SIMULIA user conference and the General Clinton Canoe Regatta, pictured below, when you next see me– and there’s lot’s of news — oh, and a big acquisition to cover, too.
Dassault Systèmes announced that it intends to acquire Apriso, make of the FlexNet suite of manufacturing operations solutions, for about $205 million. The deal, subject to regulatory approval, should close in July. Apriso first hit the scene in the early 1990s; DS says that 2012 revenue was about $50 million and that recent revenue growth has been 15% per year.
FlexNet, Apriso’s flagship product, enables enterprises to collect data from across their manufacturing operations, aggregate and analyze it to figure out what facilities and processes are delivering the best results — and then apply those best practices elsewhere. Apriso calls this Manufacturing Process Intelligence; its offering includes a reporting analytics platform (the data warehouse and integration tools), front-end visualization tools for reporting and analysis and sets of predefined screens, reports and other tools to help companies quickly analyze their data.
DS plans to add Apriso to its DELMIA portfolio to build a “comprehensive view of their business, from idea to design, to production and global product availability for consumers worldwide”.
I think this makes a lot of sense. Combining Apriso’s manufacturing process analysis tools with design and engineering enables a very broad view of innovation. Adding in the ability to see whether and how efficiently the new widget can be produced leads to a better-informed business decision that ties together market needs, in-house expertise and the ability to execute. In theory, no more botched product launches.
Apriso’s customers include a long list of blue chip names. One, Saint-Gobain, offered a quote to the press release that speaks to the power of this combination:
“Innovation is critical to winning in the competitive world of automotive glass,” said Pascal Ober SAP Competency Center director of Saint-Gobain’s Innovative Material sector. “We use Apriso to manage the distribution and execution of quality, logistics, manufacturing and compliance processes across over 60 sites worldwide. We view the ability to innovate both products and manufacturing/logistics processes as critical. Dassault Systèmes will now have a comprehensive solution for product and process innovation all the way through execution.”
While this makes sense from a product perspective, the business aspects are also quiet interesting. DS is paying $205 million or so for a company with revenue of about $50 million, a 4x revenue multiple. That’s quite a premium to what it appears to have paid in recent acquisitions. That said, Apriso is probably a more direct add to both revenue and profit than some of the recent deals, since Apriso’s current direct sales model can be more readily translated to DS’ own, much larger direct channel.
The key will be in the integration. Once you have the data collected and analyzed by Apriso, how can DS’ 3D Experience platform use it to avantage? What’s the customer benefit to buying FlexNet from DS rather than an independent Apriso?
Apriso holds two user conferences next month, so we’ll hear from customers (and perhaps DS) on their views of the future.
DS is hosting an investor call about the acquisition. I’ll update if warranted.
Image credit: Monica Schnitger