Schneider Electric SE (Rueil-Malmaison, France; www.schneider-electric.com) announces that its board of directors and AVEVA Group plc (Cambridge, U.K.; www.aveva.com) have reached agreement on the terms and conditions of a combination of AVEVA and Schneider Electric industrial software business (the Schneider Electric Software Business; forming the Enlarged AVEVA Group) to create a global leader in engineering and industrial software.
The combined entity will be a global leader in engineering and industrial software, with scale and relevance in key markets as well as an extensive technology portfolio, with combined revenues and Adjusted EBITA of approximately £657.5 million and £145.8 million respectively for the financial year ended 31 March 2017.
The company will offer a comprehensive combined product portfolio, offering an unmatched set of solutions covering all aspects of digital asset management from process simulation to design, construction and manufacturing operations management and optimization.
The Combination will create an Enlarged AVEVA Group that is well-positioned to take advantage of future M&A opportunities, building on its scale and comprehensive industry and lifecycle solution coverage. On completion, following the issue of ordinary shares in the capital of AVEVA to Schneider Electric, Schneider Electric will own 60% of the Enlarged AVEVA Group on a fully diluted basis while existing AVEVA shareholders and participants in the AVEVA share plans will retain 40% equity ownership (on a fully diluted basis). Completion, which is expected to be at or around the end of 2017, is subject to the satisfaction of a number of conditions including, amongst other things, applicable regulatory and anti-trust approvals having been obtained, AVEVA shareholder approval of the Combination, and re-admission of the Enlarged AVEVA Group. The parties are in the process of selecting a new Chief Executive Officer of the Enlarged AVEVA Group, with a proven track record and experience in managing a global software business.
The value of the consideration shares to be issued to Schneider Electric is approximately £1.7 billion based on the AVEVA Group closing share price at the Latest Practicable Date. Schneider Electric will pay to AVEVA £550 million in cash , taken together with its contribution of the Schneider Electric Software Business, will mean that Schneider Electric will hold a majority of the Enlarged AVEVA Share Capital. Such cash will be distributed to AVEVA shareholders (excluding Schneider Electric) at or around completion;
and AVEVA will also distribute £100 million in cash to shareholders (excluding Schneider Electric) at or around completion, such amount representing a significant proportion of the excess cash held on AVEVA’s balance sheet after allowing for transaction costs and a prudent view of AVEVA’s working capital requirements.
Commenting on the Combination, Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric said:
“We are pleased to reach an agreement on the combination of AVEVA and the Schneider Electric Industrial Software Business, thereby creating a global leader in engineering and industrial software. The Combination will address customers’ requirements along the full asset life cycle in key industrial and infrastructure market through a unique portfolio of asset management solutions from design & build to operations. It will also create the right environment and structure for the software teams to aggressively develop their business, while benefiting from Schneider Electric’s multiple go-to-market channels and segment expertise around the world, as well as the EcoStruxure platform and its ecosystem of partners. We believe that through increased scale and complementary footprint, the transaction will generate synergies that will benefit customers and shareholders alike.”
Commenting on the Combination, Philip Aiken, Chairman of AVEVA said:
“We are delighted to have reached agreement on the Combination with the Schneider Electric Software Business. The transaction will be transformational to AVEVA, creating a global leader in industrial software, which will be able to better compete on a global scale. AVEVA will significantly expand its scale and product portfolio, increase its capabilities in the owner operator market, diversify its end user markets and increase its geographic exposure to the North American market, in line with our strategic goals. The transaction is expected to provide significant value to our shareholders via the upfront cash payment and a significant ongoing holding in the Enlarged AVEVA Group, which will benefit from synergies and a compelling equity story underpinned by an enhanced strategic positioning.”