Quickie: Bentley adds to utility offering, acquires Power Line Systems

Bentley Systems last night announced that it will acquire Power Line Systems, maker of tools for the design of overhead electric power transmission lines and towers, for $700 million in cash or a combination of cash and Bentley shares (apparently, that’s TBD). Bentley’s materials said that they expect Power Line Systems to contribute $30 million to subscription revenue in 2022, so this could be quite a revenue multiple — but there are accounting issues that may not make this the 25x revenue purchase it appears to be. Stay tuned.

In any case, it’s quite a sum. Bentley says that Power Line Systems has “an established subscription business with no full-time go-to-market staffing”, so there’s significant potential to grow the business. The press release goes on to say that ” Power Line Systems generates extraordinary profitability and cashflow, and accordingly, the acquisition is expected to be accretive to BSY’s corresponding financial metrics”.

We’ll learn more at a briefing later today, but aging infrastructure in many parts of the world plus a significant buildout of first-time transmission networks in other parts –and the need to make both of those as resilient as possible– means significant investment by utilities and governments, that will only increase in coming decades. Bentley says that the addition of Power Line Systems to the current utilities portfolio will “uniquely position BSY to support the modernization of grid infrastructure for renewable energy sources and storage, mobility electrification, ubiquitous broadband and 5G communications, and environmental resilience and adaptation”. And if there’s currently no sales team pushing adoption of Power Line Systems solutions, that means a lot of unrealized opportunity.

The transaction is expected to close by year-end.