Equity Group Offers $1.3B for Intergraph

Intergraph Corporation , a leading maker of mapping and
visualization software, agreed to be acquired for $1.3 billion by an
investor group led by Hellman & Friedman LLC and Texas Pacific Group.

Intergraph, of Huntsville, Ala., provides software and services for homeland
security, energy, chemical, and shipbuilding infrastructure design markets.

This type of software, dubbed spatial information management (SIM), has been
a niche until recently.

SIM is becoming increasingly lucrative with the surge in demand for more
graphical Web-based designs and advancements in online visualization
technologies, such as Google Maps and Microsoft MapPoint.

IDC analyst David Sonnen said in a research note that SIM has transformed
from a specialist application to a technology with broad relevance within
many IT ecosystems.

“From enterprise areas like master data management to Google Maps, SIM
technology is becoming pervasive,” said Sonnen. “Most IT companies and users
will be affected to some degree by this change.”

San Francisco’s Hellman & Friedman and Texas Pacific Group hope this turns
out to be true.

The firms have partnered on a number of investments, including
Linsco/Private Ledger and Texas Genco. JMI Equity, a San Diego-based private
equity firm focused on the software and business service industries, will
chip in for Intergraph.

Intergraph stockholders will get $44 in cash for each share of Intergraph
common stock, a 22 percent premium over Intergraph’s average closing price
for the last twenty trading days.

The transaction will be financed through a combination of debt and equity
financing and cash.

Wall Street took heart in the news, sending Intergraph shares surging $6.12
to $43.48 in morning trading.

Intergraph’s recently reported second-quarter revenue of $152.8 million,
with net income for the period of $16.8 million, or 56 cents per share,
compared with $7.5 million, or 25 cents per share from the year-ago quarter.

The deal highlights a building trend of private equity and holding firms
either snapping up attractive or bailing out floundering public companies.

In July, Francisco Partners agreed
to purchase struggling security device maker WatchGuard Technologies, Inc.
for $151 million in cash.

Earlier this year, enterprise content management vendor Hummingbird agreed
to be acquired
by Symphony Technology Group until Open Text outbid the holding company.

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