Product lifecycle: Siemens moves to acquire UGS Corp.


Siemens Automation & Drives says its $3.5-billion agreement to acquire UGS Corp ., if approved, would make it the first worldwide manufacturing industries supplier of software and hardware across the full product lifecycle. Manufacturing hardware and software technologies are converging with product lifecycle, manufacturing, and enterprise information technologies in many segments, Siemens says. The two companies began their business relationship in 2003 with joint projects addressing digital manufacturing technology.

The offer from Siemens A&D is based on what the company is calling "a comprehensive, technologically consistent product portfolio (Totally Integrated Automation)" that will enable Siemens to provide "every customer with an integrated package of engineering and automation systems." By integrating more than 3,000 software engineers of UGS, the Group will employ around 7,000 software experts.

"With the acquisition of UGS," says Klaus Kleinfeld, president and CEO of Siemens AG, "we combine its competence in the sector of digital factories with our leading know-how in industrial automation. This combination makes our customers' processes faster, better, and more cost efficient. With the unique combination, we underscore our position as a trendsetter in automation systems and bring this business into a new dimension."

Tony Affuso, chairman, CEO and president of UGS, says, "The combination of Siemens and UGS is a clear game-changer in the global PLM industry due to our shared vision of 'Totally Integrated Automation.' Our customers win through the backing of the long-term security of their system investments provided by one of the world's largest and most successful and innovative companies. In addition, we are able to provide added value to Siemens' customers by virtue of being the most practiced PLM provider in open systems, which eases integration with the Siemens technology already in place in all of our key markets."

Helmut Gierse, president of Siemens A&D, explains: "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. On the basis of our unique offer, we aim at a long term continuation of sustainable value enhancement for A&D."

UGS, based in Plano, TX, is a leading provider of product lifecycle management (PLM) software and services. The agreement was made between Siemens and the current UGS owners Bain Capital, Silver Lake Partners, and Warburg Pincus. The $3.5-billion purchase price includes assumption of existing debt. UGS activities would go under the Siemens Automation & Drives Group (A&D). Siemens says A&D would become the first supplier for the manufacturing industries to provide an end-to-end software and hardware portfolio encompassing the complete lifecycle of products and production facilities. The transaction, announced Jan. 24, is subject to approval by relevant authorities.

UGS has a global workforce of 7,300 and more than 46,000 customers in 62 countries. Siemens describes PLM as a mission-critical, enterprise business platform that helps companies innovate and grow by enabling them to digitally create, build, and manage their products. UGS supplies customers in the automotive, aerospace and defense, consumer goods, electronics, and machinery industries.

UGS software includes collaborative product data management (cPDM), computer-aided design/computer-aided manufacturing/computer-aided engineering (CAD/CAM/CAE), and digital manufacturing simulation (digital factory). Siemens says UGS holds strong revenue and market share positions globally in digital manufacturing and cPDM, the fastest-growing segments within the PLM market. In fiscal 2005, UGS reported revenue of nearly $1.2 billion; in third-quarter 2006, the company reported the 13th consecutive quarter of year-over-year revenue growth.

Click here to read the full announcement from Siemens.

—Edited by Mark T. Hoske , Control Engineering editor in chief

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