Swiss engineering group ABB has agreed to buy Atlanta, US-based Ventyx for more than $1 billion, it has been announced.
The move will boost ABBÔÇÖs position in the management of energy networks, as well as strengthening its position in North America.
Zurich-based ABB, which sells power equipment to utilities and oil & gas companies, is buying Ventyx from San Francisco-based private equity company Vista Equity Partners.
Ventyx provides software to utilities and grid operators, enabling them to better match electricity generation with consumption. The real-time information on electricity demand, pricing and availability enables utilities to generate revenues from smart grids and carbon trading.
ABB said in a statement that Ventyx's software can also help to integrate large amounts of unpredictable renewable energies, such as wind and solar power.
The US company employs 900 people and posted revenues of around $250 million (approximately Ôé¼192 million) in 2009. It operates in more than 40 countries, with customers including leading power utilities in the US and Europe, as well as industrial businesses.
ABB will combine its network management business within the Power Systems division with Ventyx to form a single unit for energy management software solutions. The acquisition triples the energy management software market available to ABB.
The transaction is expected to be completed in the second quarter.
Joe Hogan, ABB's CEO, said: "The big advantage for energy companies, utilities and industrial customers is that they will now have a single supplier of enterprise-wide information technology platforms and power automation systems.
"The advantage for our shareholders is a cash-generating acquisition in an exciting growth market, with a strong management team, a highly complementary offering and geographic scope, and an attractive return on capital employed."
Ventyx marks ABBÔÇÖs first acquisition of more than $1 billion since 1998. The company had built up $7 billion in cash, prompting speculation it would pursue takeovers as the value of potential targets fell in the wake of the global recession.
ABB said the acquisition is in line with its strategy to pursue growth opportunities that complement its product, technology and geographical portfolio.
ABB makes components to transmit and distribute electricity, motors and generators, as well as factory robots. The company is the worldÔÇÖs biggest manufacturer of power grids. Itself the result of a merger of BBC Brown Boveri of Switzerland and ASEA AB of Sweden in 1988, ABB operates in around 100 countries and employs more than 117,000 people.
