To Anchor New Acceleration Initiative for Grid
Integration!
Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure
engineering software company, today announced that it has entered
into a definitive agreement to acquire Power Line Systems—a leader
in software for the design of overhead electric power transmission
lines and their structures—from private equity firm TA Associates
for approximately $700 million. The consideration is payable, at
BSY’s election, in cash or a combination of cash and BSY stock. As
an established subscription business with no full-time go-to-market
staffing, Power Line Systems generates extraordinary profitability
and cashflow, and accordingly, the acquisition is expected to be
accretive to BSY’s corresponding financial metrics.
The combination will substantially complete the reach of BSY’s
comprehensive portfolio for the lifecycle integration of grid
infrastructure across electrical transmission, substation, and
distribution assets, and communications towers. The resulting
breadth and depth of the company’s software and cloud services for
grid integration will uniquely position BSY to support the
modernization of grid infrastructure for renewable energy sources
and storage, mobility electrification, ubiquitous broadband and 5G
communications, and environmental resilience and adaptation. By
rare global consensus, power infrastructure is of such pivotal
priority that the U.S.’s Infrastructure Investment and Jobs Act
commits $65 billion of incremental funding for it, with Goldman
Sachs estimating that $3 trillion will need to be spent across the
world annually for electrification and renewables to fully
accomplish the environmental goals being endorsed by assembled
political leaders.
The acquisition is subject to customary closing conditions,
including HSR Act notification. Upon closing, Power Line Systems
will operate within Bentley’s new Grid Integration Group, combining
also its SPIDA analysis products and fast-growing-startup OpenTower
business, with Power Line Systems’ current CEO Otto Lynch reporting
to Bentley’s Chief Acceleration Officer Santanu Das.
Power Line Systems was founded by University of Wisconsin
professor Dr. Alain Peyrot in 1984, and is headquartered in
Madison, WI. Its concentrated focus from the outset has been
ever-improving engineering tools for overhead power line
structures, earning the supportive confidence of transmission
engineers as the industry standard of best practice throughout the
U.S., increasingly across Europe, and opportunistically in Asia.
Power Line Systems’ “PLS” software can advantageously bring
transmission-grade sophistication to broader applications in
overhead distribution and in the communications grid which—to
deliver the more intensive reach of 5G—increasingly includes newly
shared towers and poles.
Bentley Systems’ recently developed OpenTower iQ cloud service
is generating impactful new business growth by meeting the new
demands of communications tower owners for lifecycle digital twins
of their existing towers. Tower digital twins leverage UAV-surveyed
reality modeling, machine learning, and asset performance modeling
to help maximize these assets’ capacity, revenue, safety, and
reliability while minimizing costs and risks of work on site. BSY’s
new Grid Integration Group can now expand this opportunity to
existing power transmission towers, where reliability, safety, and
fitness for purpose are stressed by deterioration, weather
extremes, and vegetation encroachment.
Despite not to date having any transmission market offerings,
Bentley Systems has been ranked by ARC Advisory Group as leading
its broader grouping of Electrical Transmission and Distribution,
and Communications within Engineering Design Tools for Plants,
Infrastructure, and BIM. By bringing together Power Line Systems’
products (for transmission) with OpenUtilities Substation and SPIDA
(for distribution) and OpenTower (for communications) and
OpenUtilities Designer and OpenComms (for network provisioning),
Bentley Systems’ grid integration and digital twin offerings will
span virtually all physical grid structures, lines, and networks at
the same time as these are becoming increasingly shared by
utilities for multiple purposes—and just as grid modernization has
become perhaps the world’s most vital infrastructure engineering
challenge.
Bentley’s CEO Greg Bentley said, “Acquiring Power Line Systems
fills a very important gap in our energy grid offerings at this
fortuitous juncture when grid upgrades, resilience, and integration
combine to drive one of the most urgent and sustained growth
opportunities we’ve ever seen. Becoming the going-digital leader in
power transmission engineering also adds meaningfully to our
‘ES(D)G’ handprint—empowering sustainable development goals by
supporting the world’s much-needed energy transitions to reduce
carbon emissions. We look forward to welcoming Otto Lynch and Erik
Jacobsen, respectively chief executive and chief technology
officers of Power Line Systems, and their colleagues—who have shown
how much can be accomplished by so few, through virtuosity in
software development and relentless commitment to engineering
advancement. Our global go-to-market resources can now be deployed
to take full advantage of burgeoning market demand—a consequence of
the momentum driving incremental renewable energy sources and
ubiquitous electrification—for going digital in transmission, and
integrated grid, engineering.”
Otto Lynch said, “We are enthused to be joining the like-minded
Grid Integration Group within Bentley Systems to enlarge our
collective contributions further across the broader grid, further
across the infrastructure lifecycle, and further across the world.
The community of transmission engineers for whom Power Line Systems
has been the go-to software provider will also gain from our
expanding scope and reach.”
Ashu Agrawal, a managing director at TA Associates and Power
Line Systems board member, said, “Otto and the PLS team have
created the standard for efficiency and software-enablement of the
indispensable work of power transmission engineers. However, the
accelerated pace of the global energy transition creates a need for
further expansion of and innovation in the grid. We’re confident
Bentley Systems can provide the right surrounding constellation to
expand Power Line Systems toward full grid digital twins.”
Bentley’s CFO David Hollister said, “Our portfolio development
team has long regarded Power Line Systems as a perfect match, which
now comes at a perfect time for us to take advantage of heightened
market opportunities for energy transition and grid modernization.
In relation to the $700 million base purchase price, the deal
structure enables a tax-deductible step-up in basis that we
present-value at approximately $90 million. The transaction is
expected to close by year end, and our optionality until closing to
pay the consideration partially in shares, or as much as fully in
cash, can be accommodated under our existing $850 million revolving
credit facility, although we remain open to exploring alternative
sources of financing.
We expect the Power Line Systems business to be able to
contribute in 2022:
- approximately $30 million of subscription revenue
- accretion in our overall ARR growth rate, and
- profitability consistent with its history of EBITDA margins
more than twice BSY’s.”
Advisors
Goldman Sachs is serving as financial advisor and Simpson
Thacher & Bartlett LLP is acting as legal counsel to Bentley
Systems. Lazard is serving as financial advisor and Goodwin Procter
LLP is acting as legal counsel to Power Line Systems and TA
Associates.
Conference Call
A call for investors will be held on Wednesday, November 17,
2021 at 8:30 a.m. Eastern Standard Time. To register for the
investor call, click this link:
https://zoom.us/webinar/register/WN_sq4nyj17SeuuICWb0dOJnQ
# #
About Bentley Systems
Bentley Systems (Nasdaq: BSY) is the infrastructure engineering
software company. We provide innovative software to advance the
world’s infrastructure – sustaining both the global economy and
environment. Our industry-leading software solutions are used by
professionals, and organizations of every size, for the design,
construction, and operations of roads and bridges, rail and
transit, water and wastewater, public works and utilities,
buildings and campuses, mining, and industrial facilities. Our
offerings include MicroStation-based applications for modeling and
simulation, ProjectWise for project delivery, AssetWise for asset
and network performance, Seequent’s leading geosciences software
portfolio, and the iTwin platform for infrastructure digital twins.
Bentley Systems employs more than 4,000 colleagues and generates
annual revenues of more than $800 million in 172 countries.
www.bentley.com
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding:
the planned acquisition of Power Line Systems and the timing
thereof, the impact of the acquisition on Bentley’s financial
condition and results of operations and the products, services and
business relationships of each of Bentley and Power Line Systems.
Any statements made in this press release that are not statements
of historical fact, including statements about our beliefs and
expectations, are forward-looking statements and should be
evaluated as such. Forward-looking statements are based on Bentley
Systems management’s beliefs, as well as assumptions made by, and
information currently available to, them. Because such statements
are based on expectations as to future events and are not
statements of fact, actual results may differ materially from those
projected. Factors that could cause actual results to differ
materially include the following: Bentley’s ability to successfully
integrate or operate the business of Power Line Systems; any costs
or delays attributable to obtaining required regulatory approvals
for the acquisition; costs related to the acquisition; adverse
changes in the capital markets environment and Bentley’s ability to
access additional financing on terms acceptable to it or at all;
changes in the customer base or geographic footprint of Power Line
Systems; failure to retain personnel necessary for the operation or
integration of the business of Power Line Systems; changes in the
industries in which the customers of Power Line Systems operate;
the competitive environment in which both Bentley and Power Line
Systems operate and competitive responses to the acquisition; the
ability of Bentley and Power Line Systems to innovate, develop new
products or modify existing products; general economic, market and
business conditions; unanticipated impact of accounting for
acquisitions; and the ability to satisfy the conditions to the
completion of the acquisition on the anticipated schedule, or at
all. Further information on factors which may cause actual results
to differ materially from current expectations include, but are not
limited, those described under the heading “Risk Factors” in the
Company’s Annual Report on Form 10‑K for the year ended December
31, 2020, and the Company’s subsequent filings with the SEC.
© 2021 Bentley Systems, Incorporated. Bentley, the Bentley logo,
AssetWise, iTwin, MicroStation, OpenComms, OpenTower, OpenTower iQ,
OpenUtilities, OpenUtilities Designer, OpenUtilities Substation,
ProjectWise, and SPIDA are either registered or unregistered
trademarks or service marks of Bentley Systems, Incorporated or one
of its direct or indirect wholly owned subsidiaries. Power Line
Systems and PLS are either registered or unregistered trademarks of
Power Line Systems or one of its subsidiaries. All other brands and
product names are trademarks of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20211116006476/en/
Press: Christine Byrne +1 203 805 0432
Christine.Byrne@bentley.com Follow us on Twitter:
@BentleySystems
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