Deal roundup: Extension not reinvention at Bentley, Hexagon, Altair, Nemetschek, and Trimble
There has been so much earnings news –generally good retrospectively with varying degrees of caution looking ahead– that I’ve lost sight of one of the significant growth drivers in this PLMish world of ours: acquisitions. So here’s a quick recap of recent news, in no particular order.
First, Bentley (which announced earnings today, which I’ll get to later this week) acquired EasyPower, an electrical engineering design and analysis software maker. As I understand it, EasyPower is for “behind the meter” use, meaning designing the power systems inside a factory or other facility. Bentley plans, in time, to make EasyPower workflows available to users of its OpenBuildings, OpenFlows, OpenPlant, OpenRail, and Bentley Raceway and Cable Management applications. Why is this cool? Story time. Between my MBA program’s first and second years, I worked at a Schlumberger factory in Hungary. The shop floor turned black plastic pellets into meter cases, installed the guts of the meter, and packed them in boxes. I was there to help implement a manufacturing planning system that was intended, in part, to plan production to balance power use. I learned then that it’s more complex than loading in the machines and plugging them into the wall — in fact, that could be the worst way to go about it. Careful design of the power management system within the facility is critical to continuous operations with no outages.
Next, Seequent, a Bentley company, signed a deal with Minerva Intelligence Incorporated (Minerva) to acquire Minerva’s DRIVER product. Recall that Seequent is all about geological modeling; DRIVER enables the mineral exploration and mining industry to identify geochemical anomalies and understand geometallurgical domains by evaluating the results of test bores. DRIVER helps these users create 3D maps of geochemical anomalies and perform data analysis — end result? “Better informed and faster drill targeting decisions, particularly advantageous for multi-element deposits with more complex datasets.”
Hexagon announced the acquisition of partner LocLab, maker of proprietary LocLab’s digital twin creation proprietary technology that “leverage[s] several data input formats to balance speed, cost and accuracy – such as terrestrial videogrammetry, survey data and point clouds – but only requires photographs or videos at minimum. Videogrammetry is a highly scalable method that comes in handy when survey accuracy is not needed and speed is preferred. Whether creating 3D models of machines, buildings and manufacturing facilities or large-scale areas such as transportation networks or entire cities, the AI software compares detected objects with LocLab’s vast object library of 3D elements (street objects, building components, rail equipment, etc.) to semi-automate the creation of a semantically enriched 3D model (i.e., adding context and descriptive elements).”
None of these deals included price or multiple. Still, in all cases, the acquisitions seem small enough not to affect the acquirer’s financials.
What do you notice? Not a single CAE acquisition. Not one — given how acquisitive that market has been, that’s quite remarkable.
We did have one investment announcement by a CAE company: Altair has invested $10 million in Xscape Photonics, a start-up working on photonic chips for ultrahigh-bandwidth connections inside data centers and high-performance computing (HPC) systems. Altair explains it this way: “Until now, computing leveraged a traditional electronic approach to moving vast amounts of data from chip to chip which requires significant space and power and produces substantial heat leading to performance challenges as HPC applications scale exponentially, especially in data science and AI. By applying innovative photonics technology, Xscape has developed a platform that connects various computing elements in an environmentally sustainable way while offering the highest possible performance. This novel approach uses photonics to drastically reduce power consumption and heat production while increasing the speed and power of communications, all to support the vast increase in the amount of data transferred from chip to chip, node to node, and more.” This sounds like it has the potential to be revolutionary.
And another investment in AEC, this one by Nemetschek. The Nemetschek Group announced an unspecified investment in the start-up SmartPM, a project controls automation platform. SmartPM uses schedule analytics to identify project risks throughout construction and organizes them into critical metrics and visuals to support decision-making. Of note: Nemetschek says it led this investment round and that one consideration for the deal was that it furthers Nemetschek’s reach in the US.
And one last one, because it’s cool and BIG: Trimble, makers of everything from GPS for farming to software for construction management, said it would acquire Transporeon, a cloud-based transportation management software platform, in an all-cash transaction valued at €1.88 billion. Over 145,000 carriers and 1,400 shippers use Transporeon’s platform. Trimble says that Transporeon integrates with more than 3,000 global ERP and transportation management systems [I had no idea there were so many], “enabling a dense network to facilitate more than 25 million on-platform transports in 2022. Transporeon helps customers increase competitiveness, lower costs, reduce waste and solve complex freight problems through automation, real-time insights and network participation.”
The common denominator here is extension, not reinvention. All of these add to existing capabilities each vendor already brought to market — perhaps deepening engagement with clients, but not outright acquiring new ones. And that’s probably a solid, conservative route to take while macroeconomic and political climates are so unsettled. But the lack of CAE … that’s just weird.