Siemens Acquires Software Producer UGS for $3.5 billion

@ITXD2:Siemens Automation and Drives Group (www.usa.siemens.com) of Nuremberg, Germany, has paid $3.5 billion to acquire UGS Corp. ( www.ugs.com) a U.S. provider of product lifecycle management (PLM) software products. The acquisition will expand Siemens’ product spectrum in automation technology to include industrial software for planning, design and simulation in product lifecycle management. The transaction is subject to approval by relevant authorities. UGS generated just under US$1.2 billion in sales and earnings before income taxes, depreciation and amortization (EBITDA) of US$241 million in fiscal 2005. The market for product lifecycle management software and services has an annual volume of approximately $13 billion and growth rates between 7 and 9 percent. In a statement on the acquisition, Siemens said combining the product lifecycle management products of UGS with Siemens’ automation technology will enable Siemens to provide integrated offerings covering the entire product lifecycle for the first time. “With the acquisition of UGS, we can combine its competence in the sector of digital factories with our leading know-how in industrial automation, said Klaus Kleinfeld, president and chief executive officer of Siemens AG. “This combination makes our customers’ processes faster, better and more cost efficient. With this unique combination, we will underscore our position as a trendsetter in automation systems and propel this business into a new dimension.” In addition, Siemens AG plans an initial public offering of its automotive supply business Siemens VDO Automotive (SV), in which Siemens would hold a majority stake. Siemens said this move would give the automotive supply business the necessary financial resources and greater entrepreneurial flexibility to ensure further sustainable and profitable growth. With sales of nearly $13 billion in the past fiscal year, Siemens VDO Automotive is one of the largest and most successful businesses with the Siemens Groups. “[Taking the business unit public] would give SV greater flexibility, further reinforce its strong position in the market for automotive electronics, and actively tap the market consolidation opportunities for its growth,” said Kleinfeld.