Geo Week News

May 10, 2011

Trimble likely to acquire BIM software-maker Tekla


$489m deal indication of quickly growing BIM marketplace

SUNNYVALE, Calif.—Trimble Navigation announced yesterday it has made an official offer to acquire all shares of Tekla, a Finnish firm that makes building information modeling software, for a total of roughly $489 million. Tekla has more than 5,000 customers worldwide in the construction industry and recorded sales of approximately $83 million in 2010.

In its announcement of the proposed acquisition, Trimble’s president and CEO, Steven Berglund, said the deal would “enhance Trimble’s current construction software portfolio by expanding our BIM capabilities … The ability to integrate data throughout a project lifecycle, while eliminating costs through better accuracy and interoperability, is key to our customers’ success. BIM is becoming a strategic element in accomplishing this. Tekla and Trimble’s combined solutions will enable us to provide our customers with the broadest and most sophisticated BIM capability available today.”

Kelly Cone, innovations director at the Beck Group, an integrated development, architecture, construction, and technology firm based in Dallas, said he was “pretty jazzed” about the deal. “We’re big fans of Tekla’s software,” he said. “It’s a very clear message to the marketplace from Trimble that they’re taking BIM seriously. It’s very encouraging to see Trimble put their money with their mouth is.”

Cone said Tekla’s ability to model rebar in concrete is industry-leading and that, overall, “it’s a very good, stable platform.” He praised Tekla’s BIMsight model-based project cooperation software, and not just because they offer it free of charge. “We highly encourage all of our concrete sub-contractors to use it,” he said, “and most of our sub-contractors in general.”

The combination of Trimble and Tekla offers “huge potential on the laser-scanning side for integration,” Cone said. One of the primary challenges when scanning in the as-built environment, he said, is altering your approach to scanning so that you only acquire high-density scan data in the places you need it – corners, odd-shaped areas, etc. – and not in those places you don’t: big flat walls and floors. If Trimble can find a way to integrate its scanners, expertise with location, and Tekla’s BIM capabilities so that firms can scan much more intelligently, that could offer a real efficiency benefit to the market, Cone said.

Of course, the deal still needs to be completely consummated. Trimble’s offer is a 52 percent premium on Tekla’s share closing price on May 6 on the Helsinki NASDAQ. Gerako Oy, which holds 38 percent of Tekla’s shares, has already agreed to the offer. Another 23.4 percent of shareholders have confirmed support for the offer, assuming a better offer doesn’t come along from another firm. The official tender offer is expected to commence on May 19 and expire June 17. Trimble needs to get at least 90 percent of shareholders to agree to the offer.

If everything goes through, the deal would represent a roughly 42x multiple of Tekla’s $11.5 million in 2010 net profit, and a nearly 6x multiple of the company’s 2010 revenues.

Tekla is growing steadily, however. It reported revenues of $22.7 million for 1Q 2011, and increased revenue from $72 million in 2009 to $83 million in 2010.

Should the deal go through, Cone believes “this will drive a lot of innovation in the BIM space.” Not only is Trimble likely going to want to capitalize on its investment by growing the BIM market, Trimble’s competitors will also likely have to get creative in their response. “There aren’t a lot of other options out there for them for acquisitions,” Cone said.


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