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Hexagon Manufacturing Intelligence

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Hexagon Completes Acquisition of MSC Software

Published: Wednesday, May 17, 2017 - 09:57

(Hexagon AB: Stockholm, Sweden) -- Hexagon AB, a leading global provider of information technologies that drive productivity and quality across geospatial and industrial enterprise applications, recently announced the completion of the previously announced acquisition of MSC Software (“MSC”), a United States-based leading provider of computer-aided engineering (CAE) solutions, including simulation software for virtual product and manufacturing process development. Completion of the transaction was subject to regulatory approvals and other customary conditions, which have now been obtained.

The acquisition strengthens Hexagon’s ability to connect the traditionally separate stages of design and production—integrating real-world data generated on the production floor with simulation data to further improve a customer’s ability to reveal and correct design limitations and production problems prior to manufacturing.

MSC employs more than 1,200 highly-skilled professionals in 20 countries. Its strong brand and reputation in industries such as automotive, aerospace, and electronics spans more than 50 years.

MSC will be a fully owned subsidiary of Hexagon and operate under the company’s Manufacturing Intelligence division.

Key facts

• Purchase price of $834 million U.S. on a cash and debt free basis (enterprise value)
• In 2016 MSC generated proforma sales of $230 million U.S., with strong profitability and a high percentage of recurring revenue
• The acquisition will further strengthen Hexagon’s smart connected factory strategy to deliver enterprise solutions within manufacturing verticals
• The transaction is fully financed via bank facilities and Hexagon’s net debt to EBITDA target of 2.5 will not be exceeded
• Non-cash purchase price allocations (PPA) adjustments of approximately 10 million euros related to impairment of overlapping technologies will affect the income statement during the first quarter 2017, and approximately 20 million euros to 30 million euros related to a revenue recognition adjustment of deferred revenue (haircut) will affect the income statement during 2017
• Cash transaction costs of approximately 2 million euros will affect the income statement during the first quarter 2017
• Excluding haircut, MSC is accretive to Hexagon’s earnings as of closing

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Hexagon Manufacturing Intelligence

Hexagon Manufacturing Intelligence helps industrial manufacturers develop the disruptive technologies of today and the life-changing products of tomorrow. As a leading metrology and manufacturing solution specialist, our expertise in sensing, thinking and acting – the collection, analysis and active use of measurement data – gives our customers the confidence to increase production speed and accelerate productivity while enhancing product quality.

Hexagon Manufacturing Intelligence is part of Hexagon, a leading global provider of information technologies that drive quality and productivity across geospatial and industrial enterprise applications.