Digital transformation in the industrial enterprise sector was already happening at an incredible speed, though the effects of the global pandemic have significantly advanced the pace of this change. As industrial companies look for ways to increase efficiency and scalability, and adapt to digital business models, digital transformation has been increasingly important.
Aveva, the UK-based global leader in industrial software, is the latest company to add to this rapid transformation, with its acquisition of OSIsoft, its SoftBank-backed U.S. rival, for $5 billion. The deal is expected to close at the end of 2020 and will be comprised of $600 million in Aveva shares and $4.4 billion in cash. $900 million will come from Aveva’s balance sheet and a $3.3 billion rights issue of shares, with the remainder to be funded through debt.
The buyout of the California-based company is the latest in a series of deals made by Aveva, which has expanded its portfolio beyond the oil and gas sector. The OSIsoft acquisition is now one of the largest ever deals made by a U.K. technology company.
"Combining Aveva and OSIsoft… will not only help us serve existing customers better but also open the flood gates to new opportunities which will accelerate the delivery of our digitization vision,” Craig Hayman, Chief Executive Officer of Aveva said in a statement. “Data has been enabling organizations to more effectively determine the cause of problems by allowing them to visualize what is happening in different locations, departments, and systems. This agreement will enable our customers to improve business processes as well as eliminate inefficiencies.”
Headquartered in San Leandro, California, OSIsoft began as a data historian software startup in 1980. Today, it has installations in 127 countries with over 1,000 utility customers. Their PI System is used across manufacturing, energy, utilities, pharmaceuticals, life sciences, data centers, facilities, the process industries, and the public sector and the federal government. This system acts as a single system for recording operations data and allows for informed operational decision-making.
The combination of Aveva and OSIsoft ultimately creates another competitor in the predictive analytics field alongside General Electric, Siemens and Hitachi ABB Power Grids, according to Elta Kolo, a Grid Edge Research Content Lead at Wood Mackenzie. The merger will also help to expand the industries that Aveva serves and support customers using big data, cloud, and AI insights.