Dassault Takes Part In Multi-Billion Dollar Data Software Acquisitions Spree

Dassault, the French software giant, recently announced it would acquire American data software company Medidata for $5.8 billion. The announcement comes shortly after the announcements of Google and Salesforce on their acquisitions of Looker and Tableau, both large data visualization software companies. Dassault, however, has been a bit more deliberate and targeted on its decision to acquire Medidata.

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Dassault is focused on three major verticals that include transportation, aerospace and life sciences. There is widespread industry conviction that life sciences and clinical research companies are in demand for data processing and analytic tools and that demand is expected to grow at a rapid pace. Medidata is in such space and has been an extremely well run operation over the years. In addition, Medidata provides medical device companies with software that helps manage the clinical trials process.

Medidata has been growing steadily over the last several years from $392 million in revenues in 2015 to $636 million in 2018. It’s also maintained an impressive gross margin profile of 75% to 80% and has held net income steady in the $30 to $50 million range. Since 2014, Medidata’s stock price has just about doubled from $44 per share to over $90. The financials clearly demonstrate strong business fundamentals and Dassault was adept in moving quickly to scoop up the target prior to competitors jumping into the fray.

Dassault has seen a similar steady rise in its financials but growth has not been as dramatic. It finished 2015 with revenue of $2.8 billion and in the most recent year ended 2018, revenues were $3.5 billion. Bernard Charles, Dassault’s President and CEO, recently commented on the acquisition, “It’s a logical evolution of the scope of what we do,” and continued, “Life science is going to go through an accelerated digitization of its own processes, basically. That’s the motivation for Dassault Systemes to buy Medidata Solutions.”

Tarek Sherif, Co-founder, Chairman and CEO, Medidata provided his thoughts, “Our mission to get the right treatment, to the right patient, at the right time has fueled our 20-year journey of innovation and commitment to the life sciences industry,'' also adding, “We share common vision, values and passion with Dassault Systèmes, and our combined talents will empower the life sciences industry with an end-to-end business platform.”

The acquisition process is anticipated to complete regulatory and corporate approvals and final closing steps in the last quarter of 2019.