Siemens A&D Acquires Software Producer UGS for $3.5 Billion
The Siemens Automation and Drives (A&D) Group has expanded its product spectrum in automation technology to include industrial software for planning, design and simulation in Product Lifecycle Management (PLM) with its acquisition of U.S. software producer UGS Corp.
The purchase price for the deal is around $3.5 billion including debt. The transaction is subject to approval by the relevant authorities.
In addition, Siemens AG plans an IPO of its automotive supply business Siemens VDO Automotive (SV), in which Siemens would hold a majority stake.
UGS generated just under $1.2 billion in sales and an EBITDA of $241 million in fiscal 2005. UGS is one of the world’s market leaders for Product Lifecycle Management (PLM), a part of industrial manufacturing that allows the digital control of product development and manufacture. The market for PLM software and services has an annual volume of around $13 billion and growth rates between 7 and 9 percent. Combining the PLM solutions of UGS with Siemens’ automation technology will enable Siemens to provide integrated offerings covering the entire product life cycle for the first time.
“With the acquisition of UGS, we can combine its competence in the sector of digital factories with our leading know-how in industrial automation. This combination makes our customers’ processes faster, better and more cost efficient. With this unique combination, we will underscore our position as a trendsetter in automation systems and propel this business into a new dimension,” said Klaus Kleinfeld, president and CEO of Siemens AG.
At the same time, Siemens plans an initial public offering (IPO) of SV. Since being established at Siemens more than 20 years ago, the automotive Group has grown an average of ten percent a year through organic growth and acquisitions.
“An IPO would give SV greater flexibility, further reinforce its strong position in the market for automotive electronics, and actively tap the market consolidation opportunities for its growth,” stated Kleinfeld. Preparations for the IPO will be initiated immediately. Further details have not yet been finalized.