US-based infrastructure engineering software provider Bentley Systems has struck an agreement with investors led by Accel-KKR to acquire New Zealand 3D modelling software vendor Seequent in a deal worth US$1.05 billion.
Headquartered in Christchurch, the local independent software vendor (ISV) has grown from a single employee in 2004 to claim over 170 staff in New Zealand alone and 430 globally.
Seequent first applied implicit modelling technology to geological science more than 15 years ago, using mathematical tools to derive and visualise 3D geological models from measured data and user interpretation.
Seequent’s products include Leapfrog, its leading product for 3D geological modeling and visualisation, Geosoft for 3D earth modeling and geoscience data management, and GeoStudio for geotechnical slope stability and deformation modeling.
The company’s geoscience analysis, modelling, and collaborative technologies have seen it become a leader in its field. Today, it serves geologists, hydrogeologists, geophysicists, geotechnical engineers and civil engineers in over 100 countries.
Bentley Systems, meanwhile, specialises in software for the design, construction and operation, of infrastructure, and employs more than 4,000 people globally, generating annualised revenues of more than US$800 million in 172 countries.
The US$1.05 billion acquisition deal, which comprises US$900 million in cash, plus 3,141,361 shares, will see Seequent will operate as a standalone Bentley subsidiary.
Importantly, Seequent’s headquarters and main research and development centre will remain in Christchurch following the completion of the acquisition.
The deal sees Bentley Systems acquire the shares in Seequent held by Accel-KKR, a Silicon Valley technology-focused private equity firm that invested in Seequent in 2018 and New Zealand-based Pencarrow Private Equity.
Seequent was under 75 per cent North American ownerships as a result of the 2018 Accel-KKR investment. Bentley Systems will also acquire all other shares with this transaction.
Seequent’s CEO Shaun Maloney, who is set to step down from the top job in April – a move unrelated to the acquisition – will be replaced by the company’s COO Graham Grant, who will report to Bentley’s chief product officer Nicholas Cumins once the acquisition has been finalised.
Bentley’s complementary geotechnical engineering software portfolio, including PLAXIS, gINT and OpenGround, will be integrated in due course to support open digital workflows from borehole and drillhole data to geological models and geotechnical analysis applications, the company said.
It is hoped the integration of Bentley’s and Seequent’s solutions, for deeper infrastructure digital twins, will contribute a multiplied “ESG [environmental, social and governance] handprint”, and that imperatives for energy transition will present new opportunities for Seequent’s offering.
“By ‘leapfrogging ahead’ with Bentley to align geosciences with infrastructure engineering through deeper digital twins, Seequent underscores our conviction that better understanding of the earth creates a better world for all,” Maloney said. “Users and accounts of Seequent, as a Bentley Company, can expect business as usual, with many product and commercial synergies eventually forthcoming."
“For my Seequent colleagues, I am confident that the future is in safe hands with like-minded Bentley Systems and our COO Graham Grant, so this presents a timely moment for me to announce my planned retirement. For all, our new larger scope presents a great opportunity for shared advancement,” he added.
According to Tom Brands, co-managing partner of Seequent backer Accell-KKR, the investment firm had been looking forward to Seequent’s IPO this year but is now so convinced of the logic of Bentley combination that it is glad to anticipate instead becoming Bentley shareholders as a result of the acquisition deal.
“The Seequent board congratulates and thanks Shaun Maloney for his long service and remarkably consistent success in growing this great business, its great management team, and this great outcome for Seequent investors and colleagues,” Brands said.
Bentley CFO David Hollister said that the transaction is expected to close in the company’s second quarter. “We expect Seequent to contribute in excess of US$80 million to our ARR [annual recurring revenue] during this year,” Hollister said. “Seequent impressively has a historical and current organic revenue growth rate which, coupled with an operating margin profile similar to ours, makes Seequent accretive to our financial model.”
This seems to be the season of global tech players picking up local software vendors, with New Zealand cloud-based retail management software provider Vend on 12 March revealing it had struck a deal to be acquired by Canadian omnichannel commerce solutions vendor Lightspeed for US$350 million.