Siemens set to acquire simulation and engineering design software giant UGS

Siemens is buying the complete organisation (NX and Solid Edge CAD/CAM/CAE, Teamcenter PLM (product lifecycle management) software, the lot) for $3.5 billion, subject to the usual approvals. That’s not bad – UGS reported FY05 revenues of $1.2 billion, has shown growth for 13 consecutive quarters and the deal includes UGS’ debts thought to be around $1.4bn. It’s not such good news for current owners Bain Capital, Silver Lake Partners and Warburg Pincus, who paid about $2.05bn in 2004. UGS will come under the Siemens Automation and Drives umbrella – making Siemens the first global supplier to span software and hardware for manufacturing industries end-to-end from engineering design and development, through manufacturing engineering to production and automation systems. The move is a significant development and a surprise to industry watchers. It’s known that UGS and Siemens A&D had been working together on joint projects since 2003, particularly on ‘digital manufacturing’ (simulation and manufacturing engineering) technology, but there had been nothing to suggest a takeover. “With the acquisition of UGS, we combine its competence in the sector of digital factories with our leading know-how in industrial automation,” says Klaus Kleinfeld, President and CEO of Siemens. “With the unique combination, we underscore our position as a trendsetter in automation systems and bring this business into a new dimension.” Helmut Gierse, President of Siemens A&D, adds: "Seamless flow of information and data enable collaboration across the whole value chain. This is becoming crucial to increase productivity in the manufacturing industries where the competitive pressure is constantly rising. “With the combined portfolio of A&D and UGS, our customers will be able to enter a complete new scale of efficiency, whether they are manufacturers, engineering service partners, system integrators or machine builders. Integrated solutions will lead to reduced production costs, higher product quality, shorter time to market and increased flexibility toward market trends.” He predicts a new world order in engineering design and manufacturing in which the design of production systems spans all the way from concept and CAD development to design of logistics, service and recycling strategies – meaning improved flexibility and responsiveness to change. “By combining expertise in the physical world of automation and the virtual world of PLM software, Siemens will be the only company able to offer integrated software and hardware solutions throughout the production process. All our future industrial software and hardware products will support today’s and future leading interfaces and standards. We aim to be the first to market with innovative digital factory solutions that unify the engineering and automation domain,” says Gierse.