With billion dollar acquisition, Bentley doubles down on Digital Twins

Tom Paine

Exton-based Bentley Systems (Nasdaq: BSY) announced Thursday afternoon it was acquiring Christchurch, New Zealand-based Seequent from PE firm Accel-KKR for just over $1 billion dollars. Bentley describes Seequent as “a leader in software for geological and geophysical modeling”.

Bentley will pay $900 million in cash, the rest in company stock.

Tom Barnds, co-managing partner at Accel-KKR and Seequent board member, said, “We had been looking forward to Seequent’s IPO this year, but we are so convinced of the logic of this combination that we are glad to anticipate instead becoming BSY shareholders.”

Bentley’s current offerings enable digital twins to incorporate what’s constructed “near surface”, the company says. But Seequent’s software will enable Bentley to see deeper.

Bentley expects Seequent to be accretive to its key metrics, and boost its organic growth rate. Presumably, it will also grow Bentley’s total addressable market (TAM).

Bentley also says Seequent can benefit from Bentley’s existing presence in China.

Since its September IPO, Bentley’s share price looks as if investors are expecting an increased organic growth rate from the current single-digit level.

After closing, Bentley says Seequent will operate as a stand-alone Bentley subsidiary, with Seequent’s current Chief Operating Officer Graham Grant, succeeding its retiring CEO Shaun Maloney, reporting to Bentley’s Chief Product Officer Nicholas Cumins.

Bentley CFO David Hollister said he expects Seequent “to contribute in excess of $80 million to our ARR during this year”. I’m not quite sure what that exactly means (calendar year, or months after expected 2nd quarter close), but I guess I’ll find out in Bentley’s investor call 8:30 AM tomorrow morning.

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Now public, Bentley Systems starts $100 million venture fund, reports quarterly results.

Tom Paine

Exton-based Bentley Systems, coming off its successful IPO (Nasdaq: BSY), has committed $100 million to a new venture fund aimed at developing infrastructure “digital twins”.

Bentley plans to invest in promising technology companies addressing the emerging opportunity for infrastructure digital twin solutions for roadways, railways, waterways, bridges, utilities, industrial facilities, and other infrastructure assets.

“Taking advantage of the momentum from Bentley Systems’ initial public offering, we are excited to expand our Acceleration Initiatives by formally launching the Bentley iTwin Ventures fund to support the growth of entrepreneurial companies dedicated to infrastructure digital twin solutions,” said Greg Bentley, CEO of Bentley Systems, in a statement.

“Our iTwin Platform provides a scalable open-source foundation for technical and commercial innovation that will empower a vibrant ecosystem to creatively combine and connect what digital twins now make possible for infrastructure constituents. Proprietary analytics, data services, benchmarking, and infrastructure-as-a-service”. commercial models, for instance, are not in Bentley Systems’ direct scope, but we are glad to have a stake in bootstrapping these future successes. Here’s to the fullest going-digital ecosystem for infrastructure digital twins!”

Bentley Systems is working with venture capital firm Touchdown Ventures, which has an office in Haddonfield, to establish Bentley iTwin Ventures, and one investment has already been made

Bentley completed its IPO in September, raising almost $236.5 million at $22 per share. its shares now trade on the NASDAQ at $33.80 per share, almost exactly what it closed at on its first trading day, for a market cap of $8.9 billion. Proceeds went to selling shareholders (employees and investors), not the company’s Treasury or members of the founding Bentley brothers.

Bentley reported its first quarterly results since the IPO yesterday. Total revenues were $203.0 million, up 8.8% year-over-year; GAAP net income was $5.8 million, compared to $20.4 million for the same period last year. The decline in net income was due primarily to IPO and restructuring expenses.

Adjusted Net Income was $51.4 million vs $39.3 million in the prior year.

In the quarter, the company took a restructuring charge of $10 million, which covered a reduction in force. Bentley announced this week that it was bringing on three new senior executives, one from SAP (general manager of SAP Marketing Cloud) and two with backgrounds at rival Autodesk.

Bentley announced yesterday a follow-on offering of 10 million shares, consisting of 8.1M issued by the company and 1.9M sold by existing stockholders of Bentley; proceeds to the company will be used for debt reduction.

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