ABB Ltd. (www.abb.com), the Zurich-based power and automation technology group, announced on May 5 that it has agreed to acquire Ventyx Inc. (www.ventyx.com), an Atlanta-based software supplier to the energy industry, from Vista Equity Partners (www.vistaequitypartners.com), San Francisco. The deal, valued at for more than $1 billion, is expected to strengthen ABB’s position in the emerging “smart grid” market, and enable to the company to become a leading provider of software solutions for managing energy networks.
Ventyx is a leading software provider to global energy, utility, communications, and other asset-intensive businesses, offering a broad range of solutions including: asset management, mobile workforce management, energy trading and risk management, energy operations and energy analytics. The company also provides software solutions for planning and forecasting electricity needs, including renewables.
ABB said it will combine its related network management business within the Power Systems division with Ventyx to form a single unit for energy management software solutions. By providing ABB with broader access to the utility enterprise management market, the acquisition triples the energy management software market available to ABB, the company said.
“The big advantage for energy companies, utilities and industrial customers is that they will now have a single supplier of enterprise-wide information technology platforms and power automation systems,” said ABB Chief Executive Officer (CEO) Joe Hogan. “The advantage for our shareholders is a cash-generating acquisition in an exciting growth market, with a strong management team, a highly complementary offering and geographic scope, and an attractive return on capital employed.”
Ventyx has a large installed base in the U.S. market and Europe and operates in more than 40 countries. Its customers include leading power utilities in the United States and Europe as well as industrial businesses. The company employs 900 people and reported 2009 revenues of about $250 million.
The acquisition is in line with ABB’s strategy to pursue growth opportunities that complement the company’s product, technology and geographical portfolio. It is subject to customary regulatory approvals, and ABB expects the transaction to be completed in the second quarter. ABB intends to pay for the acquisition in cash.
“Combining Ventyx’s leading software suite with ABB’s systems and unparalleled domain knowledge of the power industry will create a business that is ideally placed to offer solutions that will help to meet the challenges of rapidly evolving energy networks,” said Vince Burkett, Ventyx CEO.
One of Ventyx’s key software applications is designed to give utilities and grid operators the information they need to better match electricity generation with consumption, even at the household level. By generating real-time information on electricity demand, pricing and availability, Ventyx’s software enables a practical business model for utilities to generate revenues from smart grids and carbon trading.
Ventyx’s load forecasting software can also help to integrate large amounts of unpredictable renewable energies, such as wind and solar power. The company provides other asset management applications to fully integrate a utility’s business and enterprise systems across the entire value chain, and a comprehensive service suite to facilitate efficient resolution of network failures.
Vista Equity Partners