Aveva-OSISoft Merger Creates an Industrial Software Giant

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Merger improves access to new sectors, reduces oil exposure
  • Aveva to pay 5.7 times its 2019 revenue to make acquisition

Aveva’s acquisition of OSISoft will create a leader in asset data collection, storage and analysis. Aveva, 60% owned by Schneider Electric, has integrated much of the French industrial company’s own asset management software. The merger will help Aveva expand into new sectors, reduce exposure to existing volatile sectors, and extend its reach across customers’ enterprises.

Both firms began life focused on the oil and gas sector. With the merger, Aveva will reduce its oil sector sales to 35% and gain access to over 1,000 utility clients of OSISoft, as well as the pharmaceuticals sector and other process manufacturers.

While both companies have a large market share, their annual revenue is only in the hundreds of millions of dollars. This could partly be because OSISoft and Aveva sell point solutions, meaning client contracts are only tens to hundreds of thousands of dollars each. The merger may help build a more expansive product that is easier to sell enterprise-wide, similar to how Microsoft and Salesforce have scaled.

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