|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||122.25 - 123.71|
|52 Week Range||69.16 - 123.71|
|Beta (5Y Monthly)||1.02|
|PE Ratio (TTM)||26.99|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Apr. 30, 2019|
|1y Target Est||N/A|
(Bloomberg Opinion) -- The latest round of the SoftBank Group Corp. fire sale looks set to be a much-needed success for Chairman Masayoshi Son. But it’s not a validation of his strategy.Britain’s Aveva Group Plc. is in advanced talks to acquire OSIsoft LLC, an industrial software-maker backed by SoftBank, Bloomberg News reported on Friday. The deal would be a win for Son, whose strategy of writing big checks to invest in technology companies through his Vision Fund venture capital arm has faced mounting criticism, not least from activist investor Elliott Management Corp. The fund lost SoftBank almost $18 billion last year, whereas Elliott’s efforts to refocus attention on SoftBank’s other investments have prompted a recovery in the share price.OSIsoft is a bright spot. Son paid a little under $1 billion for a 45% stake in 2017 (the parent SoftBank company bought the initial stake, then it was lumped into the Vision Fund when that got off the ground). He’ll secure a 150% return on that investment if Aveva pays the reported $5 billion — pretty decent going.But that success also highlights the failings of so many other bets. When the Vision Fund poured billions of dollars into the likes of WeWork and Uber Technologies Inc., the aim was to give the start-ups a war chest they could use to undercut the competition on price. That would then squeeze out competitors, allowing them to raise prices and finally make a profit. So far, the vision has failed to pay off: Uber and WeWork alone accounted for write-downs of $9.8 billion for the fund last year. The OSIsoft investment was different. SoftBank did not inject any new capital into the business, but instead bought the stake from existing investors. While that gave J. Patrick Kennedy, OSIsoft’s founder and chief executive officer, cover to reinvest profits in growth, it didn’t make the California-based company a bully boy with the funds to push others out of business. Such a strategy would have been unwise: Competitors include the likes of General Electric Co., Siemens AG and Robert Bosch GmbH — industrial giants with pockets deep enough to compete in a price war.It was a classic late-stage venture bet on a company with good technology in a fast-growing niche — in this case, the collection and analysis of data from industrial machinery.For Aveva, acquiring OSIsoft is likely to require some inventive financing. The Cambridge-based company, which has an enterprise value of 7.4 billion pounds ($9.6 billion), can’t fund a deal from its current balance sheet, with just 114 million pounds of cash.Based on optimistic assumptions about the firms’ combined earnings, Aveva is also unlikely to raise more than 1 billion pounds in debt, since enterprise software companies can typically sustain debt representing only about double their Ebitda, an earnings measure. To fund the rest of the proposed $5 billion deal, Aveva can either offer stock, sell new equity or both.Schneider Electric SE, the French industrial company that owns 60% of Aveva, probably won’t want to dilute its stake, since software is a key leg of its growth strategy. That makes offering OSIsoft’s owners stock in the new company, which would entail such a dilution, less likely than a capital increase in which Schneider could buy some of the new shares.Were Aveva to seek 3.5 billion pounds by offering new equity, Schneider could readily participate: It has both 5 billion euros ($5.9 billion) of cash and headroom to raise more debt of its own. And Aveva could still offer a small slice of equity to OSIsoft’s Kennedy to keep him personally invested in the combined firm.There’s a risk that Son will point to investments such as OSIsoft as evidence of the Vision Fund’s merits, particularly if he resurrects efforts to raise a follow-up to the $100 billion fund. Investors would do well to remember that savvy technology bets can be more lucrative than trying to price out the competition.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Aveva Group Plc is in advanced talks to acquire industrial software maker OSIsoft LLC for about $5 billion, according to people familiar with the matter.Aveva, which combined with Schneider Electric SE’s industrial software arm in 2018, has entered exclusive talks about a purchase of OSIsoft and could announce a deal within weeks, said the people, who asked not to be identified because the matter is private.Aveva, based in Cambridge, England, beat out several other industrial bidders, the people said. Emerson Electric Co. also considered an offer, people familiar with the matter said in June.Aveva confirmed the talks in a statement. “There can be no certainty that the discussions between Aveva and OSIsoft will lead to any agreement concerning the possible acquisition,” the company said.OSIsoft Founder and Chief Executive Officer J. Patrick Kennedy, along with minority owner SoftBank Group Corp., have been working with advisers on a potential sale of the company, Bloomberg News previously reported.SoftBank’s stake is held in its Vision Fund.Representatives for OSIsoft, SoftBank, Schneider and Kennedy declined to comment.The world’s biggest industrial companies have been acquiring technology firms for the past few years as they shift their focus from machinery to software and automation.Deals in the technology space have been resilient during the pandemic, with Analog Devices Inc. announcing a $20.9 billion transaction for rival chipmaker Maxim Integrated Products Inc. last month. Nvidia Corp. is in advanced talks to buy SoftBank-backed Arm Ltd., Bloomberg News reported last month.OSIsoft, based in San Leandro, California, sells software for use in sectors including oil and gas, utilities, manufacturing and pharmaceutical development, according to its website.SoftBank, which acquired a minority stake in the company in 2017, has been selling assets including a large chunk of its stake in T-Mobile US Inc. to finance stock buybacks and pay down debt. Its Vision Fund lost 1.9 trillion yen ($17.9 billion) last fiscal year after writing down the value of investments in firms including WeWork and Uber Technologies Inc.(Updates with Aveva statement in fourth paragraph, additional background in last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The group, which sells products ranging from electrical car chargers to home automation systems, now expects a 7-10% organic revenue decline and adjusted earnings before interest, taxes, and amortization (EBITA) margin to shrink to 14.5-15.0% year-on-year. Schneider had previously forecast organic revenue growth and a higher core profit margin for the year, but scrapped this in March due to the pandemic. The Paris-based company also flagged further restructuring costs of between 400 million euros and 500 million euros (363.10-453.87 million pounds) over three years.