* Aveva, California-based OSIsoft both provide industrial
software
* Deal to be funded in part by $3.5 bln proposed rights
issue
* Aveva says deal will step up its role in digitisation of
industry
* Aveva shares up 5.9%
(Adds details on Softbank's and Mitsui's stake, updates shares)
By Yadarisa Shabong
Aug 25 (Reuters) - British industrial software provider
Aveva Group is buying SoftBank-backed peer OSIsoft for
an enterprise value of $5 billion, it said on Tuesday, as it
seeks to expand its services with the California-based firm's PI
system.
The deal will see Japanese tech conglomerate Softbank
- which has embarked on an asset sales plan - sell its
44.7% stake in OSIsoft for more than $2 billion in cash, James
Kidd, deputy CEO and CFO of Aveva, told Reuters in a phone
interview.
As industrial companies have been incorporating more
software into their manufacturing to cut costs and improve their
supply chains, providers such as Cambridge-based Aveva are
growing their businesses.
Aveva said it plans a rights issue amounting to about $3.5
billion to help fund the purchase of OSIsoft, which makes
software that captures data from ships, chemical boilers, power
plants and other facilities in industries including oil and gas,
mining, pulp and paper and water.
Shares in Aveva, a FTSE 100 company, were up 5.9% by
1026 GMT on news of the deal.
"The acquisition of OSIsoft ... will accelerate the Enlarged
Group's role in the digitisation of the industrial world, which
is being driven by a need for sustainability, the industrial
internet of things, Cloud, data visualisation and artificial
intelligence," Aveva's CEO Craig Hayman said.
He described OSIsoft's PI system, which collects, analyses
and shares data from multiple sources, as "one of the most
coveted businesses in the industrial sector". It will be
established as a business unit of the enlarged company, Aveva
said.
Aveva's last major deal was three years ago when France's
Schneider Electric took a 60% stake in the company.
Aveva said Schneider Electric has committed to vote in
favour of the OSIsoft deal and take part in the rights issue.
The British company said it would fund the acquisition using
a combination of rights issues, cash on balance sheet and new
debt, as well as issue shares to one of OSIsoft's shareholders,
Estudillo.
The deal is expected to close at the end of the year.
Aveva's profit rose 22% in the year to March but its share
price fell 5.5% this year by Monday's close after it warned in
April that its performance in the first half of this financial
year would be hit by the global economic downturn.
OSIsoft's founder and CEO J. Patrick Kennedy will be
appointed to a newly established role of chairman emeritus,
Aveva said.
Kennedy's Estudillo has a 50.3% stake in OSIsoft, while
SoftBank holds 44.7% and the remaining is held by Mitsui & Co
.
Mitsui said it will sell its interest in OSIsoft for $250
million.
Lazard was the sole financial adviser to Aveva.
[BREAKINGVIEWS-SoftBank wins most in $5 bln industrial-data
M&A]
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Anil
D'Silva and Susan Fenton)
