Dassault Systèmes (DS) today announced an agreement to acquire 100% ownership of ABAQUS Inc., a leader in nonlinear finite element analysis software, in an all-cash transaction approximating $413 million, subject to the satisfaction of certain customary conditions and approval by the regulatory and merger control authorities, especially in the USA and in Germany. The transaction has received the unanimous support of ABAQUS's owners and management team and is expected to be completed by the end of the third quarter of 2005. DS expects the planned acquisition to be immediately accretive to net income, excluding acquisition costs and the impact of deferred revenue accounting treatment.
We have been supporters of the concept that development of the complete virtual product must encompass more comprehensive simulation and analysis throughout the product development lifecycle. As product complexity continues to grow, coupled with increasing customer demands for product variations, the ability to quickly simulate and analyze new options is imperative. Further, analysis and simulation capabilities are required by a larger audience, not just specialists in manufacturing companies. Acquisition of ABAQUS will enhance DS’ ability to deliver analysis and simulation more seamlessly integrated within the design and engineering environment, and to deliver a more complete PLM solution that can be utilized by a wider group of users. This will enable companies to more effectively leverage engineering and design resources while responding more quickly to market pressures.
Founded in 1978, ABAQUS, Inc. is a leading provider of software and services for advanced finite element analysis. The ABAQUS® software suite has been adopted by major corporations across all engineering disciplines as an integral part of their design process. ABAQUS offers a complete solution for simple to complex linear and nonlinear engineering problems, using the finite element method. A wide range of structural, thermal, and coupled analyses is supported. (http://www.abaqus.com)
With this initiative, DS will also diversify into markets beyond its existing manufacturing base. DS announced SIMULIA, a scientific platform designed to enable the integration of all types of simulation applications. We are very positive on this action by DS. It is consistent with our belief that analysis and simulation are core components of PLM, and demonstrates their commitment to invest in broadening their suite of offerings through acquisition. Their challenge will be to maintain the focus on analysis and further develop their offerings after this program is incorporated within the DS development family and must compete internally for resources and investment with other substantial DS product development efforts. However, the new combined program offers potential for additional revenues beyond what either company could have obtained independently. We do not expect this acquisition to have any significant negative impact on the relationships with current partners of either DS or ABAQUS.
This market event further establishes Dassault Systèmes as a “big gorilla” of PLM, with a very broad range of programs that are integral components of their overall PLM strategy.
