Britain tech giant company Aveva has agreed to acquire rival OSIsoft for $5 billion to bring together industrial software and data management offerings.
Considered as one of the largest deals in the UK tech industry, Aveva’s decision to take over the Softbank-backed company is part of its strategy to expand growth. Coming a long way from the heartland of oil and gas investments, the company seals the deal to leverage on tech.
For Aveva, OSIsoft is considered the ‘most prized’ assets in the data management industry. Combined with Aveva’s cutting-edge engineering operations and performance offerings, the two companies can generate up to £1.2 billion annual revenue.
The integration of ISOsoft’s PI system into Aveva’s software portfolio can drive bigger data, cloud, and artificial intelligence insights. With these sets of products, the company can help customers accelerate digital strategies on storage and data management.
“The new normal has required a shift in business focus and imperatives. Moving forward, businesses will witness reduced capital investments, changing working processes, a heightened need for visualization tools, and greater agility,” said Aveva product officer Ravi Gopinath.
The tie-up will give Schneider Electric 57 percent stake over OSIsoft, as it owns the majority of Aveva. Meanwhile, OSIsoft’s majority shareholder Patrick Kennedy will sit in the chairman position, but not takeover any board position in Aveva.
Kennedy will only take about 4 percent of the stake in Aveva. The deal has a combination of rights issue worth $3.5 billion, consisting of cash and new debt facilities.
While Schneider considered OSIsoft’s valuation as pricey, it has considered the purchase decision as a strong industrial move. Several analysts considered this move as risky and the deal can present obvious integration flaws that need to be monitored.
Enterprise Deployment Models
The collaboration between the two companies can create massive data management and sharing across enterprises, enabling better decision-making. OSIsoft works with over 1,000 utility companies, oil and gas companies, and chemical companies.
Joining forces means extending the services and products delivered, highlighting digital transformation in the 20th century.
Aveva will introduce scenario-driven integration between products called Cloud-First. The company will also create software development kits to provide solutions to a range of digital issues.
“The tremendous advantages of deployment and ownership costs and the removal of the localized barriers to allow unprecedented levels of work efficiency and collaboration could add to the rich domain content of our portfolio,” said Aveva product officer Ravi Gopinath.