RIB takes majority stake in BSD to aid AEC collab, gain access to US market

Jun 7, 2019 | Hot Topics

Yesterday, RIB Software and Building Systems Design (BSD) announced that RIB is acquiring a majority in BSD. RIB, you may recall, makes desktop and cloud solutions for the construction industry that harness the data in BIM models and uses it to enable construction processes like planning, procurement and execution. RIB has been very Europe-centric, and has been trying to expand via partnerships with Microsoft and others.

BSD, on the other hand, is proudly North America-centric, providing what it says is the “most sophisticated master guide specification-writing platform in North America (BSD SpecLink)”. Specifications (specs, in cool-kid lingo) make construction projects happen. Typically text documents with drawings or sketches interspersed, specs spell out exactly how an owner or prime contractor wants others on a project to do their jobs. Spec-writing platforms (and BSD is one of many) automate this but using databases of standard tasks. Spec writers can choose from templates and menus of related tasks so that they don’t miss anything, they use industry-standard language and can track edits/changes — they gain all of the typical advantages of a standardized system over a more random writing exercise. With most platforms, too, they can see how their spec stacks up against industry standards for sustainable processes, for example. Spec writing is a crucial industry step and platforms like BSD’s SpecLink smooth friction.

But specs are somewhat regional, so work has to be done to make them more international and expansion has been slow. Enter RIB.

BSD said in the announcement that its recent entry into Canada markets, led BSD to “want to team up with an international company that could help support its continued global expansion.” Said BSD CEO Chris Anderson, “Our goal is to make collaboration easier, including through seamless BIM integration and revolutionary cloud technology … We are looking forward to working with RIB in this expanding area to push the digitization and transformation of a whole industry.”

For his part, Tom Wolf, CEO of RIB Group, said “We’re dedicated to developing new technologies that will enhance productivity and transform the construction industry into one of the most advanced industries in the 21st century. We are thrilled to partner with BSD, a like-minded company that shares similar goals and vision for the future. We look forward to a collaboration that will undoubtedly advance the industry.”

SpecLink, BSD’s spec writing platform, was launched in 2018 and is clearly one catalyst for this deal. SpecLink Cloud lets users view embedded BIM object data, identify potential conflicts, automatically adjust specs, and view BIM models from any web-enabled device. Integrating RIB’s MTWO to all of the content managed in BSD’s SPecLink “has the potential to digitally transform the building and infrastructure industry to one of the most advanced industries. Re-platforming concepts like MTWO, combined with BSD data services, will enable developers and owners to build modern cities and infrastructure tailored for Gen Z and following generations,” according to RIB. No timeline for these integrations was given.

The other catalyst? RIB gaining access to the US market. Mr. Wolf, RIB’s CEO said that “The investment in BSD demonstrates RIB Group’s strong commitment to the U.S. market.” In fact, “[t]hrough BSD,” says RIB, “up to 500,000 users for the MTWO cloud platform, driven by BIM and Digital Transformation, can be converted in the medium term from 8,000 construction suppliers, 80,000 architecture and engineering firms with over 10 employees, 150,000 construction companies, and 270,000 owners.” All in North America, most in the US.

The details: RIB acquired 60% of BSD for $42 million. According to RIB, BSD’s annual recurring revenue (ARR) is forecasted to exceed $14 million in 2019 –so a purchase price multiple of 4xish — with organic growth of approximately 25%.

The bottom line: More consolidation in AEC, as everyone races to digitize construction. And as everyone builds their positions to compete with the mammoth portfolio Autodesk will deliver, once it fully integrates its recent acquisitions.