AspenTech to acquire Hyprotech
Cambridge, Mass. - Aspen Technology announced on May 10, 2002, it has agreed to acquire Hyprotech (Calgary, Alberta, Canada) from U.K.-based AEA Technology for $99 million.
AspenTech and Hyprotech have been leading suppliers of process simulation and engineering solutions to the chemicals and pharmaceuticals industries for many years. By combining the companies' best-in-class technologies, resources, and domain expertise, AspenTech will become the strategic provider of process simulation and engineering software across major process industry market segments.
According to ARC Advisory Group data and company estimates, the available market for these solutions is estimated to be approximately $1 billion in software and services revenue annually. As a result of this acquisition, AspenTech expects to deliver more powerful solutions that are easier to use than those currently available, and that it will do so more rapidly and cost-effectively than previously.
By joining forces with Hyprotech, AspenTech will broaden and deepen its process simulation and engineering offering and expand into the upstream petroleum market with applications for modeling oil and gas production. In addition, the combination will enhance the value of AspenTech's end-to-end petroleum solution, by creating a single open, unified process modeling framework, from upstream production to downstream refining and marketing.
AspenTech believes its integrated process modeling and engineering framework will dramatically increase engineering and manufacturing productivity in the process industries. Customers will be able to create, standardize and reuse more optimal designs, reduce time to evaluate and implement process improvements, and lower manufacturing costs. This unified modeling environment will enable customers with joint petroleum and chemicals businesses to make more consistent, profitable design and operating decisions across the entire enterprise.
Hyprotech develops and markets software solutions designed to improve profitability and operating performance for process industry clients by simulating plant design and operations. Hyprotech serves more than 17,000 users, with approximately 600 major customers in more than 80 countries. Hyprotech counts among its customers more than half of the world's refineries and a substantial majority of the world's oil and gas producing companies.
In its fiscal year ended March 31, 2002, Hyprotech reported revenues of approximately $50 million using subscription accounting to recognize revenues covered by term-license agreements. Were the fiscal 2002 revenues recognized upfront, consistent with AspenTech's current and future accounting method, revenues would have totaled approximately $69 million.
On this basis, Hyprotech's revenues grew 15% from fiscal 2001 results and operating margin was approximately 20 percent in its latest fiscal year.
AspenTech plans to integrate Hyprotech into its newly created engineering products business unit. As with previous AspenTech acquisitions, the two companies have created an experienced integration team to optimize alignment of the two organizations. While continuing to support and develop both companies' flagship products, the integration team expects to merge respective technologies, establish migration paths, and identify best practices to favorably impact the design of next-generation products.
AspenTech says it believes these initiatives will enable the company to quickly realize its integration goals, while remaining focused on meeting the corporate growth, cost-savings and profitability objectives it has established for the current fiscal year and beyond.
Control Engineering Daily News Desk
Dave Harrold, senior editor