French industrial conglomerate Schneider Electric has agreed to buy the rest of Aveva, in a deal that values the UK software developer at nearly £9.5bn and strips the London market of one of its few remaining large tech groups.
The French group said on Wednesday that it would pay £31 a share in cash for the 40 per cent of Aveva it did not already own and aimed to close the deal in the first quarter of 2023.
Spun out of Cambridge university in the 1960s, Aveva is one of Britain’s oldest technology companies. Its software has focused primarily on the energy, infrastructure and manufacturing sectors — areas Schneider covers as well — although it has expanded beyond that.
The buyout is one of the biggest UK acquisitions this year, but will leave the London stock market with just a handful of tech companies of any size. Late last month, Canada’s OpenText struck a £5.1bn deal for UK software developer Micro Focus International.
Schneider’s offer marks a premium of about 40 per cent to Aveva’s share price in late August, when the French group confirmed it was exploring a potential buyout. Shares in Cambridge-based Aveva were up 2.2 per cent at £31.15 on Wednesday.
The French company has owned 60 per cent of Aveva since a £3bn reverse takeover in 2017 that saw Schneider fold its software assets into the UK company, which retained a London listing.
Schneider’s offer for the remaining 40 per cent was recommended to the UK software maker’s minority shareholders by a committee of Aveva directors judged to be independent. The deal is structured through a scheme of arrangement and will need support from shareholders.
“This realistically now all comes down to whether or not this is a good enough price to persuade sufficient minority shareholders to support it,” analysts at Cowen noted, adding that antitrust approvals were already in place.
Explaining the rationale for a full takeover, Schneider said that it would allow a “faster execution of Schneider Electric’s software growth strategy”. Aveva will retain its Cambridge headquarters and an autonomous team, it added.
Schneider’s chair and chief executive Jean-Pascal Tricoire told analysts on Wednesday that the company wanted to “accelerate the path to deliver to our customers one data hub”.
Schneider provides automation and software services, including systems to help companies improve energy efficiency in buildings and factories.
“Energy is at the top of the agenda for all our industrial customers,” Tricoire said.
Schneider also wants to help Aveva move to a subscription-based model and co-operate in areas such as research and development, Tricoire said.
Before the news of Schneider’s potential bid, Aveva had issued a profit warning in which it flagged inflationary pressures and said growth would slow in 2022.
The British group sought to diversify away from its core customer base in oil and gas with the $5bn acquisition of US rival OSIsoft last year.
Schneider’s own market value has grown sharply in the past four years as more of its clients looked to save energy and use its services in areas such as data centres, though its shares have dropped more than 30 per cent this year. The group let go of its Russian business in July by selling it to local management, joining a wave of foreign companies to leave after the invasion of Ukraine.
Schneider agrees £9.5bn buyout of UK software developer Aveva Republished from Source https://www.ft.com/content/dd2bc82e-1027-481c-b4e9-0cb575153e39 via https://www.ft.com/companies/technology?format=rss