Hexagon to Acquire Infor's EAM Business and Form a Broader Strategic Relationship with Infor and Koch

Hexagon AB announced an agreement to acquire Infor’s global EAM (enterprise asset management) business, for approximately 2,750 MUSD. The terms of the agreement include establishing a deeper commercial relationship between Hexagon and Infor as well as Hexagon and Koch Equity Development, both subsidiaries of Koch Industries, Inc. Hexagon gains a best-in-class, SaaS-based asset management solution – Infor EAM – which is used to track assets, digitalize maintenance operations and enable customers in nearly any industry to reach optimum operational efficiency.

The Infor EAM solution is highly scalable and easily configurable to meet the needs of specific verticals, such as mass transit, food and beverage, facilities management and much more.

With Infor EAM, customers can put their operations to work for them - optimizing business processes and asset maintenance strategies to ensure operational efficiency and asset reliability. Key capabilities of the Infor EAM solution include work order management, inventory optimization, safety and compliance measurement and reporting, asset planning and decision-making, and mobile application extensions. The Infor EAM solution also includes APM (asset performance management) capabilities, enabling integration of real-time asset data for condition monitoring, and can also integrate with mapping and positioning solutions as well as live camera and sensor feeds for asset visualization and tracking.

Moving forward, Hexagon and Infor will form a strategic partnership comprised of reseller agreements and opportunities to accelerate cross-selling of complementary solutions across common customers in markets such as automotive, discrete manufacturing, and public safety.

Further, several Koch companies are already valued customers of the Infor EAM solution and Hexagon’s enterprise project performance and industrial facility solutions. To unlock additional value for Koch companies across the entire lifecycle of their manufacturing assets – from initial design to day-to-day operations – Hexagon and Koch have signed a Strategic Alliance Memorandum of Understanding to further expand the use of Infor EAM and Hexagon’s solutions.

The Infor EAM business has approximately 500 highly skilled professionals serving nearly 3,500 customers globally. Infor EAM will be reported under Hexagon’s Industrial Enterprise Solutions segment but serve all Hexagon businesses focused on asset-intensive ecosystems, like manufacturing, industrial facilities, mines, farms, autonomous mobility, buildings, infrastructure, cities & nations, and defense.

Transaction overview

Infor’s EAM business’ revenue for 2021 is forecasted at 184 MUSD with an adjusted operating margin of more than 40 per cent after integration and annual recurring revenue above 70 per cent. Infor’s EAM business is driving a transition of its customer base to SaaS, which is expected to be over 40 per cent of revenue in 2021 (over half of software revenues) and has been growing at a trailing 3-year Compound Annual Growth Rate (CAGR) of approximately 35 per cent. Given the strong fit of Infor EAM across Hexagon’s businesses, the transaction is expected to generate sales synergies, growing to approximately 100 MUSD by 2026. Transaction and integration costs including Purchase Price Allocations (PPA) and deferred revenue adjustments affecting the income statement will be communicated as soon as access to accounting has been obtained and the calculations are completed.

Under the terms of the agreement, Hexagon AB will pay 800 MUSD in cash and issue 132.6M series B shares to Koch, in accordance with the mandate granted by the Annual General Meeting 2021. The total purchase price will be approximately 2,750 MUSD based on an agreed share price of 125.73 SEK, on a cash and debt free basis. The exact total purchase price is dependent on the share price at the closing of the transaction. After the completion of the transaction, Koch will own 4.9 per cent of the equity in Hexagon AB and become a long-term, active shareholder in addition to the business partnership.

After the non-cash issue, Hexagon’s share capital will amount to 85,761,451 EUR. Including the new shares, the acquisition is expected to be accretive to Hexagon’s adjusted earnings per share (before PPA and other purchase accounting adjustments) as of closing.

Completion of the transaction is subject to regulatory approvals and other customary conditions, which are expected to be fully completed during the fourth quarter 2021. Completion of the transaction is also subject to various other contractual clauses, including certain rights in the event of a material adverse change in relation to the parties' businesses or valuations.