M&A Case Study & Success Story Strategic Acquirer
Highlighting Complex Enterprise Software Systems Deal
Georgia Tech - Sell-Side Representation
Press Release: Intergraph Acquires GT STRUDL Engineering Software System from Georgia Tech
“Early on in our relationship, I knew Ben as a competitor leading the team at REI/STAAD. Over the years, we grew to respect his successes in sales leadership and corporate development, culminating in the successful exit to Bentley Systems. When considering our own exit strategy, we knew Ben was the right person to engage, and we were right.
Ben has a rare gift for sensing connections and the skills to execute on his intuitions. His expertise was evident as he combined industry knowledge, technical prowess, and financial prudence to help us formulate our strategy. He commands respect within his network and quickly establishes credibility in new situations. This was demonstrated as he successfully sourced investors and provided a pipeline of “suitors” for GT STRUDL, giving us the luxury of choice.
I wholeheartedly recommend Ben for Corporate Development and M&A without any reservations!"
Dr.Kenneth M. Will
Co-Founder, GT STRUDL
Associate Professor Emeritus
School of Civil and Environmental Engineering, College of Engineering
Georgia Institute of Technology
Introduction
This case study and success story examines the M&A lifecycle for the transaction between Georgia Tech’s GT STRUDL, a computer-aided structural engineering (CAE) software system that assists engineers in the structural analysis and design process and Intergraph Corporation, a leading producer of engineering enterprise software. The transaction successfully closed with Intergraph acquiring GT STRUDL Engineering Software System from Georgia Tech in February 2014.
Company Overviews
The Georgia Institute of Technology (Georgia Tech) is a leading public research university with over 45,000 students studying at its Atlanta campus, international campuses in France and China, and online. Representing 50 states and 149 countries, its renowned Colleges of Engineering and Computing are among the nation's top-ranked, complemented by strong programs in business, design, liberal arts, and sciences. With nearly $1.3 billion in annual research funding, Georgia Tech is a major driver of economic development in Georgia and the nation. Its mission is to develop technology leaders who improve the human condition, continuing a 137-year tradition of innovation and service.
Intergraph Corporation is a leading provider of engineering, geospatial, and security software, helping customers visualize complex data. Their software is used by businesses and governments in over 60 countries to transform vast amounts of data into clear visual representations and actionable insights. Intergraph's solutions enhance the efficiency of plants and ships, create intelligent maps, and protect critical infrastructure globally.
The company operates in two main divisions: Process, Power & Marine (PP&M): Focuses on enterprise engineering software for designing, constructing, and operating plants, ships, and offshore facilities. Security, Government & Infrastructure (SG&I): Offers geospatial solutions for defense, intelligence, public safety, security, government, transportation, photogrammetry, utilities, and communications industries.
Summary Of The Deal Rationale
For the Seller: Formulate an exit strategy and succession plan for an established, commercially successful and mission critical software system for safeguarding the intellectual property, employee base and subject matter experts, brand and customers providing for continuity beyond the retirement of the Founding Principals.
For the Buyer: Fill a gap for structural design & analysis software technology by acquiring a globally recognized time-tested software solution that was not only familiar but trusted by existing high profile customer base. Further, reduce dependency on third party software solutions that in time were acquired by competitors that caused disruption in customer work flows due to conflicting interests.
The Problem We Solved
The Georgia Tech Perspective: GT STRUDL was developed at Georgia Tech in the 1970s and has been maintained and updated for nearly 40 years by a team of highly respected academics lead by Dr. Kenneth Will, an Associate Professor Emeritus in the School of Civil and Environmental Engineering at the Georgia Institute of Technology.
Dr. Will has served as Co-Director of the Computer-Aided Structural Engineering (CASE) Center which developed GT STRUDL, a fully integrated finite element analysis and structural design Computer-Aided Engineering (CAE) system used by civil/structural engineers and students in over 30 countries. GT STRUDL software certification procedures hold the rare distinction and are in full conformance with the applicable provisions of the U.S. Nuclear Regulatory Commission and the U.S. Department of Energy Quality Assurance and Quality Control regulations. GT STRUDL’s prestigious customer list includes global engineering and oil & gas industry giants such as Bechtel Corporation, Shell, NASA, just to name a few.
The Founding team at GT STRUDL and GTRC (Georgia Tech Research Corporations) jointly realized that the mission critical software could not be maintained by GTRC independently once the Founders reached retirement age. They concluded that an exit strategy should be formulated and would be in the best interest to safeguard the software product, development team/employees and global customer base.
The Intergraph Perspective: Intergraph’s Smart 3D software, is the de facto standard and global leader for 3D design solutions specifically tailored for plant, offshore, shipbuilding and the metals and mining industries. Smart 3D employs a breakthrough engineering approach that leverages real-time concurrent design, rules, relationships, automation and provides a multi-discipline design environment where designs are fully visible to all parties.
Intergraph’s customer centric approach allowed for customers to choose from best of breed and leading structural design and analysis software solutions. Smart 3D provided support for import, export and translation from common file formats conforming to industry standards. However, this approach caused additional support burden on resources and in some cases detracted from customer delight. The need for a proprietary structural design and analysis solution soon became apparent for filling this gap and reducing dependency on third party solutions that in time had been acquired by competitors.
Deal Synergy Solutions
Role & Contributions
Ben Parikh, CEO & Founder of Deal Synergy Solutions, was retained by GTRC to help formulate an exit strategy and succession plan for GT STRUDL.
Advisory and consulting services included:
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Working with the Founding Principals to help define current positioning which included technical and financial analysis at the company level.
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Profiling and evaluation of employee base and compensation structures.
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Profiling and evaluating the customer base.
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Understanding historical sales and GTM approach and current practices
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Profiling and understanding indirect and international sales channels via strategic partners
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Researching and presenting macro market and industry trends.
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Researching and presenting competitive analysis resulting in market mapping and positioning at the industry level.
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Creating CIM (Confidential Information Memorandum)
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Conducting workshops (3 day) with potential individual investors and industry executives
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Presenting company and CIM to potential strategic acquirers
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Managing and conducting all Executive dialogues and presentations
Comparable Company
Analysis & Valuation
Deal Synergy Solutions ran a Comparable Company Analysis as part of the valuation process when estimating the value of GT STRUDL. Comparable Company Analysis is based on the idea that companies with similar characteristics should have approximately similar valuations. Deal Synergy Solutions compared the profile of GT STRUDL to that of similar comparable companies and known transactions in the global Structural Analysis and Design software space.
Comparable Companies & Transactions:
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Bentley Systems acquires STAAD, USA (2005)
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Bentley Systems acquires RAM, USA (2005)
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Autodesk acquires Robobat, France (2007)
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Trimble acquires Tekla Corporation, Finland (2011)
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Trimble acquires CSC Ltd., United Kingdom (2013)
