Schneider Electric fully endorses AVEVA's proposed acquisition of OSIsoft
Rueil-Malmaison (France), August 25, 2020 - Schneider Electric, the global
leader in digital transformation of energy management and automation, fully
endorses the transaction announced today by AVEVA regarding its proposed
acquisition of OSIsoft for a consideration of $5bn.
Schneider Electric is AVEVA's majority shareholder with 60.2% ownership and
board representation, and fully consolidates AVEVA in its group financial
statements. Schneider Electric believes this represents the next step in
AVEVA's evolution. This acquisition will provide significant value to
industrial customers as well as across Schneider Electric's other end-markets:
Building, Infrastructure and Data Center. The details and rationale of the
transaction have been shared in AVEVA's press release today available on their
In 2018, Schneider Electric merged its industrial software business with AVEVA
to create a unique value proposition for customers in the process and hybrid
industries. Since then, Schneider Electric has supported AVEVA's expansion,
including into new end-markets and geographies. The merger has been successful
and has been creating value for both companies, continuing to deliver strong
growth and synergies for both AVEVA and Schneider, with AVEVA now part of the
Strategic Context of the Transaction
* The transaction announced today is aligned with Schneider Electric's
strategic vision to grow its suite of best-in-class, end-to-end software. The
Group remains committed to helping customers on their digital transformation
journey to drive sustainability, efficiency and resiliency.
* OSIsoft's PI System is a leading platform for data acquisition and data
structuring for its customers, specialized on the mission-critical
applications on which AVEVA and Schneider are focused. It delivers
aggregation and visualization of real-time sensor, actuator and control data
in an open infrastructure to support best-of-breed ecosystems. It is
scalable, supporting small to enterprise-wide deployments.
* This agnostic data ingestion and structuring layer complements Schneider
Electric's existing software portfolio which covers the full lifecycle from
Design & Build, including AVEVA's Unified Engineering platform, RIB and
IGE-XAO, to Operate & Maintain, including AVEVA's Asset Performance and
Planning & Operations applications and the targeted Ecostruxure Advisors
developed by Schneider. These capabilities are delivered on the edge and on
the cloud depending on technology and customer preference.
* The acquisition of OSIsoft by AVEVA reinforces its position as a leading
agnostic Industrial IOT software player while retaining the culture, speed
and business model of a software company.
* With this transaction, Schneider Electric will have enhanced offerings across
the life cycle in all its end-markets with an unparalleled portfolio of
industrial software for long-term revenue growth.
* The Group remains focused on growing its Software and Service revenue which
represented 17% of group revenues in H1 2020. Such revenues have higher level
of resiliency and proportion of subscription/recurring revenue. The OSIsoft
transaction is expected to be around 30bps margin accretive to Adj EBITA
based on LTM (12 months to June 30, 2020).
Commenting on the transaction, Jean-Pascal Tricoire, Chairman and CEO said:
"All of our customers are focused more than ever on their digitization agenda
on which AVEVA and Schneider have been partnering to deliver solutions which
range from "control agnostic" to fully integrated "plug-and-play". Always
targeting mission critical applications, we have built a full portfolio of
capabilities with the clear objective to bridge the world of Design & Build and
the world of Operate & Maintain, collecting an ever-growing amount of data.
OSIsoft and its renowned PI System bring along the needed capability of a
reference and agnostic platform for data acquisition and structuring - across
the whole life of the installations which are at the core of our focus. At a
consolidated Group level, we plan to bring OSIsoft teams access to new
geographies, new segments, new customers, and create value from connecting data
to the unparalleled set of applications from AVEVA- and Schneider portfolio of
* Schneider Electric has agreed to guarantee c.60% of the AVEVA bridge loan to
equity and has committed to subscribe its pro-rata share (c.$2.1bn) of the
proposed AVEVA rights-issue to fund the transaction.
* Schneider Electric acknowledges a marginal dilution of its stake in AVEVA to
c.57% due to the structure of the transaction and the merits of having
OSIsoft's founder, Dr. J. Patrick Kennedy, as a key stakeholder. The Group
continues to believe that a majority shareholding in an agnostic software
company is important to drive revenue synergies
* The additional consolidated long-term debt at Group level is limited to $900m
and the Group remains attached to maintaining a solid investment grade credit
* The Group's capital allocation policy of M&A in the core, disposal of
non-core activities and dividend remain unchanged.
* In light of the economic uncertainties and the effects of the proposed
transaction, Schneider Electric expects to put its current share buy-back
program on hold in the near term, though it commits to neutralise its
employee share plans.
AVEVA has arranged a conference call at 08.30am UK time to discuss the
transaction, details are available in AVEVA's press release. In addition,
Schneider Electric will host a call from 10.15am to 11:00am UK time to discuss
its perspective on the transaction and take questions from analysts and
investors. Dial in details for the Schneider Electric's call at 10.15am UK time
UNITED KINGDOM: + 44-20-7950-6551
FRANCE: + 33-1-70-75-25-35
USA: + 1-210-795-1143 or toll free +1 866-297-1588
JP Morgan is acting as financial advisor to Schneider Electric.
About Schneider Electric
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