AEC Quickie: NEMT sells, RIB buys
You might remember that Nemetschek co-owned a company called DocuWare, which is focused on document management and the AEC workflows that surround project documents. The companies have been intertwined for at least a decade but now DocuWare is being acquired by Ricoh (yes, that Ricoh — further evidence that AEC acquisitions are hot hot hot) and, as part of that deal, Ricoh bought out Nemetschek’s 22% stake in DocuWare. The companies declined to specify how much Nemetschek stands to gain from the sale, except to say that it “will lead to a book profit.” That, plus anticipated revenue growth that trickles down to the bottom line, will lead to “an additional one-off rise in the EPS of about 40% compared to the previous year’s figure.”
Nemetschek says that “DocuWare solutions are successfully integrated in some of the brands of Nemetschek Group such as Nevaris and Crem Solutions. Following the sale of the interest, the close cooperation between DocuWare and the Nemetschek brands will continue”.
Bottom line? Execution and the strength of the partnership between Ricoh/DocuWare and Nemetschek. I wouldn’t read too much into the one-time profit; the real issue for customers is how the sale affects DocuWare’s 600-odd resellers who support joint customers, and how the integrated components are maintained and enhanced. It is in everyone’s best interest to continue the strong working relationship …
Staying in AEC, RIB Software, best known for its iTWO platform for the construction industry, announced that it is acquiring 70% of CCS in South Africa for $31.5 million, which the company reports is an 8.5 EBIT/DA multiple. For you multiple junkies, RIB says that CCS, which is privately held, “generat[ed] 13.6 Million+ USD ARR revenue (more than 18 Million USD revenue in total forecasted for 2019) with high profitable EBIT/DA margin of ~30% in a high potential and fast-growing market.”
CCS’ main product is Candy, a cost estimating and project control solution. I am periodically asked about Candy and, a couple of years ago, spoke with a few users who had only good things to say about the discipline that using it imposed on their businesses — and that it led to real project benefit. I am not familiar with CCS’ BuildSmart, but RIB says it is a “complete construction solution similar to an iTWO 4.0 concept for the African, Middle East and other select markets.”
And that’s what’s so interesting about this deal: RIB says that “50% of the company’s revenue comes out of Africa and around 30% out of Middle East”. (The remaining 20% seems to be opportunistic: from the U.K., Portugal, India, Australia and New Zealand.)
There’s such potential for PLMish solutions in Africa because of demographic shifts. Young populations, booming cities, but not much money so efficiency is paramount. According to its press release, “RIB wants to support Africa to develop cities and infrastructure for the Gen Z [Residents under 20, about 50% of the African population, according to RIB]. With the investment in CCS and through the partnership with the leading IT-Services provider in Africa, the EOH Group, we will provide comprehensive solutions to our clients in Africa like we do in Australia and other markets like German speaking or Spanish speaking markets.” The question becomes how many of CCS’ users can be migrated to/sold on iTWO.
So. Two very different deals that highlight the jockeying for position that’s going on in AEC. Both Nemetschek and RIB are riding the BIM wave that will only accelerate as new workers and their technology expectations enter an AEC workforce that has to cope with demand for more and better infrastructure.