Mergers and acquisitions are a common occurrence in the manufacturing technology sector, but the recent news that PAS Global agreed to be acquired by Hexagon AB is interesting for a couple of reasons.
First, Hexagon, headquartered in Sweden, provides plant design and engineering software for industrial facilities. This can now be married with the PAS technology for real-time situational awareness in the control room, as well as asset management and operation technology (OT) cybersecurity risk management. This combination gives manufacturers a holistic approach to managing the entire industrial lifecycle of the plant.
Second, this acquisition was not planned. PAS CEO Eddie Habibi, who founded the Houston-based company in 1993, said he did not have a merger in mind a year ago when he initiated a process to raise investment capital as a way to expand market reach and the company’s technology footprint. “I was an engineer when I started the company and I never thought of growing it to divest it,” Habibi said, remembering the early days when the only goal was to help other engineers escape the sheer terror of dealing with control room alarms going off and not knowing if they could recover from an incident.
Catering to continuous process industries like oil and gas, chemical, pulp and paper, and power generation, PAS is positioned as an OT integrity company, providing software that reduces process safety risks to deliver trusted data for decision-making and optimized profitability. Several years ago, the company added technology that can prevent, detect, and remediate cyber threats—as cybersecurity and safety go hand in hand.
The cybersecurity technology landscape has so much space to grow, especially as plant equipment and devices are more interconnected. “There’s a wide portion open to be captured, which is why we went out to raise capital,” Habibi said, noting that Hexagon was one of the potential strategic investors. “When Hexagon offered to acquire 100% of PAS, we had to make a tough decision. We weren’t ready for an exit, but we want to build and take market share faster. The difference between growing organically with venture capital versus joining a world-leading software company in the industrial sector is vastly different.”
The reason PAS agreed to the Hexagon acquisition is due to the significant alignment in company cultures and complementary product portfolios, Habibi said. PAS will join Hexagon’s Process Power Marine division (PPM), which is a leading design and construction software company, and which will now have a cybersecurity business. In addition, all of Hexagon’s industry segments, including agriculture, infrastructure, mining, and more, will benefit from the PAS cyber technology. To that end, PAS extends Hexagon’s global customer footprint in the process industries.
“We will continue to offer our current products as there is no overlap between our solutions,” Habibi said. “In fact, we are looking forward to leveraging the data from each of our platforms to create new innovative and disruptive technologies that will enable digital transformation, enhance process safety, and extend our cybersecurity products.”
Terms of the agreement were not disclosed and completion of the transaction is subject to standard regulatory approvals. But once done, the PAS brand will remain and Habibi will assume a new role as founder and strategic advisor to the president of the company, a good use of his engineering expertise. “My primary focus in this role will be to spend time with customers and our internal technologists to identify technology solutions to existing and unforeseen challenges facing the industrial sector.”
While the acquisition of PAS may have been unexpected, and for Habibi, a bit bitter sweet, ultimately, it is a positive move for all involved—especially the customers of both companies.