Hexagon has acquired Intergraph, a global provider of enterprise engineering and geospatial software, for a cash purchase price of $2,125 million on a cash and debt free basis. Hexagon intends to pursue a rights issue corresponding to $850 million as soon as practically possible following completion of the acquisition. In recent years, Intergraph has consistently shown strong and resilient financial results. In 2009, sales amounted to $770 million and EBITDA to $189 million.
The company is expected to report sales of about $830-840 million and EBITDA of roughly 200-210 MUSD in 2010. In 2009, about 40% of Intergraph’s sales were generated from the US, 36% from EMEA, 15% from Asia Pacific and 9% from the rest of the world. The combination of Hexagon’s leadership in solutions that capture rich geospatial data using aerial and ground based point cloud sensor technology, with Intergraph’s leadership in GIS and CAD application software, will enable the enlarged Hexagon Group to develop and provide unrivalled integrated solutions to clients.
Following the acquisitions of Brown & Sharpe in 2001, Leica Geosystems in 2005 and NovAtel in 2007, Intergraph is the natural next step due to its global software capabilities. With the integration of Intergraph, Hexagon will cover all aspects of the measurement technology market from capturing three dimensional data from ground, air and space, processing data to creating, managing and delivering information via GIS and CAD solutions.
“With the acquisition of Intergraph we are able to seamlessly connect the real world with maps or drawings. By adding Intergraph’s technologies to our product offering, Hexagon will be able to create new exciting solutions that will change the way our customers operate in several industries across the world.” says Ola Roll¬¬n, President and CEO of Hexagon AB. “We are very pleased that Hexagon has selected Intergraph to play a key role in their software expansion strategy” says R. Halsey Wise, Chairman, President, and CEO of Intergraph. “We believe Hexagon’s significant global resources and technologies will allow further investments in our customers, software solutions, people and future”
Commitments have been secured to finance the acquisition of Intergraph and to refinance Hexagon’s existing Ecu1,000 million revolving credit facility. As soon as practically possible following completion of the acquisition of Intergraph, Hexagon will pursue a rights issue corresponding to approximately $850 million. Hexagon and Intergraph will generate strong cash flow and the net debt/EBITDA ratio is expected to be around 2.5 by 2012.
Melker Schörling AB and Ramsbury Invest AB, two of Hexagon’s largest shareholders, and Hexagon’s CEO and CFO, altogether representing 53% of the votes and 35% of the capital in Hexagon, have undertaken to vote in favour of the rights issue at an extraordinary shareholders’ meeting and subscribe for their pro rata shares of the offering. Ramsbury Invest AB has also undertaken to subscribe for about an additional 16% in excess of its pro rata share of the offering. Consequently, subscription commitments for more than 50% of the intended rights issue have been received.