Dassault Systèmes today acquired nonlinear finite element analysis software provider ABAQUS Inc. in an all-cash transaction of $413 million, four times ABAQUS' annual revenues.
The move by Dassault gives the PLM provider a realistic simulation software tool that allows users to simulate the usage of products early in the design process, rather than testing an actual physical prototype -- a costly process especially when design faults are uncovered.
For instance, by using ABAQUS' software, a user could perform a simulated drop test on a laptop or cell phone far earlier in the design process, possibly saving redesign costs later in the traditional product development lifecycle, according to Mark Goldstein, president and CEO of ABAQUS, and who will lead Dassault's simulation division. "It is clear that simulation can play an important role in the very front end of the design process to validate concepts and to see the behavior of concepts," Goldstein said on a conference call with analysts and members of the press. "It also plays a role during the entire PLM lifecycle. The goal is to reduce the time and cost for physical testing."
With the acquisition, "we are actively investing in the realistic simulation market," said Bernard Charlès, president and CEO, Dassault Systèmes, during the conference call. "We want to invest in this market because our customers have been asking us to address this sector. We want to expand and strengthen our PLM offering." Charles estimates that the realistic simulation market will grow from $2 billion today to $4 billion by 2010.
Dassault's acquisition of Providence, RI-based ABAQUS is significant and probably vaults the company into the number one position in terms of industry revenues, analysts said. "This acquisition really positions Dassault Systèmes well," said Dick Slanksy, senior analyst at ARC Advisory Group. "This sets Dassault apart from UGS. Dassault made a conscious decision to acquire the best in breed provider of realistic simulation software, adding that the realistic simulation market is very fragmented. "There are many small companies focusing on small pieces of the engineering process. ABAQUS is a highly advanced technology company. Seventy of its employees have PhDs," he pointed out.
In conjunction with the ABAQUS acquisition, Dassault has also unveiled SIMULIA, a scientific, open platform that will enable the integration of all types of simulation applications. SIMULIA will support all simulation domains and Dassault hopes it will accelerate innovation by supporting the capture and deployment of best practices for predicting product behavior, as well as reduce the cost of ownership for scientific applications. SIMULIA will also give users access to simulation capabilities without requiring the steep learning curve of disparate, traditional simulation tools, according to a Dassault statement.