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More stories by this authorThe pronouncement was overshadowed by the Cambridge, Mass., firm's first quarter financial results and decision to lay off 200 workers. Besides, such big-picture strategy shift often move glacially.
But today, it's clear the rejigging was far more than lip service as ApenTech agreed to pay $99 million cash for Hyprotech, a Canadian supplier of process simulation and engineering software for oil and gas refiners.
"Given the strength of our engineering business and the healthy dynamics of the petroleum industry, we are excited about the potential of this combination to deliver significant value to both our customers and our shareholders," said Larry Evans, AspenTech's chairman and CEO.
To help pay for the acquisition, AspenTech will raise $50 million from the issuance of 4.2 million shares of common stock and related warrants in a private placement. AspenTech also raised its earnings expectations for the year by 31 percent because of the pickup.
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Hyprotech, of Calgary, Canada, had revenues of approximately $69 million (based on upfront rather than subscription method of accounting) in fiscal 2002. Revenues grew 15 percent from fiscal 2001 results and operating margin was approximately 20 percent in its latest fiscal year.
The firm, a subsidiary of AEA Technology, has more than 600 major customers in more than 80 countries, including more than half of the world's refineries and a majority of the world's oil and gas producing companies. The deal, which requires approval of AEA shareholders, is expected to close next month.
"Hyprotech and AspenTech share a joint vision of enabling our customers to use a consistent set of process models throughout the enterprise to make faster, more profitable decisions," said Wayne Sim, Hyprotech's CEO. Sim will become chief product officer at AspenTech.
Shares of AZPN rose 0.72, or 6 percent, to 12.64 at midday. In the last 52 weeks, the issue has ranged from 7.79 to 30.
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