8 on a Wednesday? Yup. Quick notes on Rockwell/Plex, 3D Systems, Lectra, Hexagon, Autodesk, Altair, Propel and Procore
Things have been hopping here at Schnitger Corp global headquarters and we’re way behind on blogging about important PLMish news. Before we get into earnings and capital market days, a quick catchup:
Rockwell+Plex = done deal. Earlier this month, the companies announced Rockwell’s acquisition of Plex had closed, and that Plex will be reported (financially) as part of Rockwell’s Software and Control operating segment. Look for the first report that includes Plex sometime in November. Rockwell had earlier estimated that Plex would add $15 million in revenue for its fiscal 2021 (ending September 30) and $180 million before accounting treatments to fiscal 2022.
3D Systems continues to reinvent/retarget itself, this time announcing that it has added Oqton’s “cloud-based, AI-enabled Manufacturing Operating System” to its offerings. 3D Systems CEO Jeffrey Graves told investors that the combination of Oqton and 3D Systems will accelerate the adoption of additive manufacturing techniques and technology. Oqton was founded in 2017 and it sounds as though it has minimal revenue today but 3D Systems CFO Jagtar Narula sees “high-margin growth with software revenues to hit $100 million by the end of 2025”. The deal is expected to closing in Q4 2021.
Lectra just keeps buying. Most of the PLMish companies I speak with maintain deal pipelines, as they look at their strategic make vs buy options, what’s on the market at any moment, and weigh expected prices against returns. It’s a constantly moving jigsaw puzzle. Letra announced the acquisitions of Gerber in February 2021, Neteven in July and Gemini CAD in September. Neteven is being acquired in two chunks: 80% for EU 12.6 million now, and the rest in 2025 “for an amount between 0.6 to 0.9 times 2024 recurring revenues”. Gemini is being acquired in three tranches, the first of which is 60% of Gemini for EU 7.6 million, and the rest in September 2024 and September 2026. “The total consideration for the acquisition of 100% of Gemini’s capital will depend on Gemini’s revenue growth, and should be comprised of between 13 and 20 million euros.” Neteven’s SaaS platform “enables brands to simplify and monitor the distribution of their products … centralizes the product catalog and information on stock levels, sales prices and orders, in order to automate and facilitate distribution on online marketplaces” — so, an e-commerce play. Gemini, on the other hand, “has developed … essentially Computer Aided Design (CAD), for small and medium-sized fashion companies” — so, a creation tool. Combined with Gerber’s PLM, Lectra is shaping up to cover the entire product chain, from concept creation to manufacturing to distribution.
Hexagon, just today, announced that it is acquiring Jovix for its construction industry material tracking solution. Hexagon says Jovix’s “cloud-based, IoT-enabled, mobile, configurable workflow platform offers visibility and traceability into the status and location of materials throughout the Engineering, Procurement, and Construction (EPC) lifecycle. This … ensures construction crews have required materials without delay to complete their work according to plan. This is achieved by fully digitizing the supply chain to provide real-time, geo-contextual, and relational visibility from fabrication to installation … The software has been deployed in 25 countries on more than 650 job sites, including multibillion-dollar oil and gas and chemical construction projects. There are currently more than 7,500 Jovix users worldwide.” No details were announced, but Jovix is expected to have no material impact on Hexagon’s earnings. The deal should close this week.
Finally, on the acquisition front, AEC Magazine says that Autodesk has invested in “iOFFICE (which recently merged with SpaceIQ), a rebranded FM developer which was better known historically in the Autodesk developer community as Archibus FM”. Click on the link to read what Martyn Day wrote about it. My take: Autodesk said several years ago that it wasn’t interested in building operations, which was really rather ridiculous– of course it is! A building (or any asset) is built in a few years but has an operating life measured in decades. There’s so much value lost when an asset operator ignores the data created during design and construction; a tighter and smarter integration between design, construction, and operations can let operators make better, more informed, decisions across the lifecycle. And this isn’t as simple as shoving data from one step to the next; it must be updated to reflect the as-is condition.
But there’s more many flowing around in our space. money. Altair announced that it has secured $200 million via a private placement from Matrix Capital Management Company. Altair turned over nearly 3 million shares of stock for the cash. Bentley did a private placement earlier this year; these sales enable companies to raise capital for expansion, acquisition, and other needs without going through the rigamarole of a public offering.
But it’s not just the public companies seeing infusions of cash. Propel announced that it has secured $20 million in Series C funding to scale its life sciences and high-tech industry solutions. Per Propel’s press release, the company has raised a total of $48 million in funding to date. Propel plans to use the funds to further “development of Product 360 – the only unified quality management (QMS), product lifecycle management (PLM) and commercialization solution built on Salesforce” — whose venture fund led this round of financing.
Last, a bit outside the PLMish realm, but very important in the world of AEC projects: Procore will acquire Levelset, a lien management platform. A lien (not lean, as you manufacturing types are used to) is a legal requirement that puts a debt against an asset — the house that secures your mortgage. In construction, materials are bought or work is done WAY before anyone gets paid, so there’s a lot of borrowing to cover payrolls and purchases. Each loan comes with paperwork and Levelset tries to help contractors deal with compliance. Interestingly, Procore CEO Tooey Courtemanche also said that Procore will leverage “industry data, including payments and compliance activity [collected vis Levelset], allowing us to deliver valuable risk intelligence to our customers, and to develop innovative financial products.” If I read that correctly, contractors will be able to benchmark their performance against others, and perhaps over time secure better interest rates and maybe reduced compliance workloads. We’ll see. Levelset has, over 3,300 customers today and it wasn’t cheap: Procore said the purchase price is about $500 million ($425 million in cash and $75 million in Procore common stock). The transaction is expected to close in Q4.
So. Much. Money. Floating. Around.